Sat | Oct 20, 2018

Flawed from the start! - HAJ blames design error for cost overruns

Published:Thursday | February 1, 2018 | 12:00 AMChristopher Serju/Gleaner Writer
Gary Howell, managing director of the Housing Association of Jamaica (HAJ) addressing the Public Accounts Committee of Parliament on Tuesday. Paying close attention is Doreen Prendergast, chief technical officer in the Ministry of Economic Growth and Job Creation.

The Hills of the Boscobel housing development project, for which the Housing Association of Jamaica (HAJ) signed an $802 million contract on April 11, 2011 for the construction of 99 housing solutions and 159 service lots in St Mary on which it lost $492 million was doomed from the start, managing director Gary Howell disclosed on Tuesday.

"We started it under a flawed design, and that led to serious design issues while implementing the project," he told Tuesday's Public Accounts Committee (PAC) meeting of Parliament in Gordon House. The HAJ head was responding to questions about issues highlighted by an activity-based audit conducted by the Office of the Auditor General in 2015.

"HAJ did not engage the principles of good governance in its implementation of the Jamaica Economical Housing Project (JEHP), which was undertaken at a cost of $8.6 billion. HAJ entered into a contractual agreement without the benefit of a feasibility study and design works.

"Consequently, HAJ did not satisfy itself that value would be received for the $8.6 billion. The JEHP should have delivered 3,306 housing solutions comprising 937 housing units and 2,517 service lots. To date, the HAJ has only developed 70 housing units (with 80 in progress) and 1,980 service lots. As at August 2015, the HAJ paid all the funds over to the contractor. The GOJ has not received value for money based on the initial projections. Only seven per cent and 79 per cent of the deliverables for housing units and service lots, respectively, have been achieved," according to an edited excerpt from the auditor general's report.

This was despite subsequent substantial remedial action to address issues relating to soil suitability, change of design, and rescoping of the works, a situation that is not likely to recur, Howell sought to assure the PAC.

Managing director of the Housing Association of Jamaica Gary Howell says that the agency has improved on its project-management skills.

"We have improved on our records management. We have implemented quality-control measures to ensure that we deal with these from the planning stage of the project ... instead of waiting until we are implementing to begin quality control," he explained.