A HUGE overspend on work at the New Jetty is to be investigated by the Public Accounts Committee.
It is probably the worst the island has known. The project was expected to cost £2.5m. but actually ended up costing £14m. – nearly six times more. That means taxpayers have to find an additional £11.5m. or approaching £300 each.
But it could have been even worse. Contractor Balvac was claiming a total of £27.3m.
‘We will be carrying out a thorough investigation before we report back to the States,’ said PAC chairman Deputy Leon Gallienne. ‘I can’t say when that will be as it is a matter of doing it when resources allow.’
He said he would not comment on the cost until the investigation was complete. Public Services minister Bernard Flouquet gave details of a mediation settlement in the States yesterday.
An independent engineer overseeing the project certified that it cost £4.8m. The eventual settlement was £9m., broken down into £6.8m. for the contract plus £2.2m. for legal and financing costs.
‘However, the total outturn costs will be in the region of £14m. inclusive of all legal and technical services incurred by the States,’ said Deputy Flouquet.
‘In addition, a condition of the settlement is that all remedial works to the jetty as listed by the engineer are undertaken by the contractor at its own cost and a financial bond has been provided to safeguard the States in this respect.’
The settlement was approved by the Public Services board on 10 July and endorsed by Treasury and Resources on 18 July.
A comprehensive report on the project will be brought to the States by Public Services, hopefully at the same time as the one from PAC.
Retired engineer Ralph Gabriel was involved in remedial work on the jetty in the 1980s.
‘One would question whether the original contract had been properly negotiated by adequately experienced people,’ he said yesterday.
Meanwhile, the St Sampson’s marina contract remains unsettled.
The project had a contract value of £3.4m, the amount certified by the engineer was £4m, while the contractor is claiming a further £3.1m.
Article posted on 31st July, 2008 - 2.30pm
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4 Article Comments
Deputy Galliene tells the Guernsey Press “We will be carrying out a thorough investigation before we report back to the States,I can’t say when that will be as it is a matter of doing it when resources allow”
Perhaps Deputy Galliene should treat the small matter of a £11.5 million overpayment on a £2.5 million project, as an immediate investigation where answers are urgently needed.
Let the denials begin!
In the real world somebody would at least be responsible for this and have the good grace to fall on their sword….I doubt any heads will even twitch, never mind roll! We should run a sweepstake for the best excuses from our politicians and public servants…I’ll start with “it was the UK consultants” they always seem to get the blame.
The claim is that as the money is being paid out of the Port Holdings Account,the taxpayer is not paying for the overspend.
Two slight problems here :
1 the Port Account is skint
2 the Port Account Holding is a States of Guernsey account and therefore at the end of the day belongs to the taxpayer.
Every single time there is a significant capital expenditure project in Guernsey we end up with a major overspend.
A commercial business would sign a contract in advance which sets out how much a project will cost and how long it will take. If the contractor misses the agreed targets it is they who should be liable for any losses. How come the States don’t seem to be able to do this? Don’t they use contracts? Don’t they employ project managers oversee these projects and prevent overspends?
More to the point - how come we, the taxpayers, always end up footing the bill?
I’m sorry to say that, in my opinion, the problem stems from the poor calibre of many of our politicians - and in some cases their downright incompetence.
Come on States of Guernsey - its just not good enough - time you got your act together.