JDIP fall guy says politicians were well aware of extra spending and did nothing

Former chief executive officer of the National Works Agency (NWA), Patrick Wong, has challenged claims that there was overexpenditure on the Jamaica Development Infrastructure Project (JDIP) while he was in charge.

A forensic audit has found that the US$400 million borrowed under the JDIP was to complete projects over the course of five years, with US$180 million to be spent in the first two years.

However, at the end of that two-year period - March 2012 - US$232 million had been expended, and almost all of the remaining funds had been committed.

In his first public response since the findings of the audit were tabled in Parliament, Wong - who resigned under a cloud when the allegations about JDIP mismanagement first surfaced - has pointed a finger at the then political directorate, particularly the Cabinet.

According to Wong, the political directorate failed to act to ensure the smooth running of the multimillion-dollar programme.

"There was no overexpenditure and there were no cost overruns, but there were additional expenditures - with the approval of the Ministry (of Works) - for additional work that had to be carried out due to unscheduled activities such as devastation wrought by nature, including heavy rains," Wong told The Sunday Gleaner.

FINDING THE TRUTH

Wong asserts that even with the flurry of additional activities and costs, expenditure for the 2011-2012 financial year was US$2 million less than the US$150 million projected.

He said persons interested in the truth should use the Access to Information Act to view first-hand the contents of a letter he dispatched to the Cabinet then led by Prime Minister Bruce Golding.

"No one responded (to that letter)," complained Wong.

He charged that when the JDIP started, the Ministry of Transport and Works' Capital 'A' budget for 2009-2010 had already been spent.

"The ministry, through the NWA, was in the process of effecting emergency works as a result of heavy rains in 2008."

Wong also charged that the emergency work was suspended in early 2009 as the financing earmarked by the Government had been depleted.

"This was emergency work which had started and needed to be completed in order to fix the emergency and protect the investment expenditure that the Government had already made," said Wong.

The former NWA boss said there was an additional cost of US$16 million in the first year. "Most of that was accounted for emergency works that we had to complete under Year One, and in addition to that, there were unscheduled and emergency works to projects like Newport West and Coffee Valley that were not initially factored in."

Wong said there was another US$75 million, in additional costs in Year Two, which was scheduled to end in 2012.

"That included payment for the Jamaica Emergency Employment Programme of almost US$18 million. We had nothing to do with that!" he declared.

According to Wong, an additional US$9.3 million of the US$75 million was utilised by the Office of the Prime Minister, which initiated another programme that was approved by the permanent secretary in December 2011.

FLUCTUATING COSTS

"We also had fluctuation in excess of US$20 million … . Fluctuation is when the basic price of materials such as asphalt and steel as quoted in the contract escalates, and we had a serious escalation beyond our control. The contract speaks to that. It's automatic."

Wong noted that fluctuations in the price of material are not the same as variations in the cost of the project.

"These are things beyond our control. We can't know how much asphalt is going to be, and we can't predict the price of steel. So there weren't any overruns. There were merely additional expenditures - all approved by the various entities."

Wong charged that then Minister of Transport and Works Mike Henry informed the ministry, the Road Maintenance Fund, and the NWA that US$150 million would be provided in the Budget for JDIP for 2011-2012.

"So we planned accordingly, incorporating the Tropical Storm Nicole damage and other expenditures, and we came up with a US$150-million programme. This was submitted in October 2011 to the China EXIM Bank to be drawn down on the loan for 2011-2012."

MAINTENANCE FUND UNDERPERFORMING

According to Wong, the China EXIM Bank wrote to the Road Maintenance Fund to advise that it was underperforming, which meant that it would be drawing down less.

"The end result is that accommodating the fluctuations and everything else, we spent US$148 million between April 2011 and March 2012, which is the normal financial year, so the rate of expenditure was well within what was promised to the minister and the ministry."

Wong further charged that this expenditure should have been placed in the Supplementary Estimates for the fiscal year, but this was not done, although the programme was in train.

"I wrote, in September 2011, to the minister and the ministry informing them that with all these extra works to be done …the programme would be shut down in September 2011."

According to Wong, despite the clamour from individual members of parliament for work to be done in their constituencies, Cabinet refused to act.

Wong said Henry took a note to Cabinet dated September 30, 2011, informing his colleagues that if the additional budget of US$50 million was not injected, the programme would be closed, but no response was forthcoming.

"Again, there is collective responsibility," Wong stressed.

gary.spalding@gleanerjm.com