March 15, 2012
The road works on New Providence might be back on track, but there are several "program risks" that could further derail the controversial project.
According to a "Project Profile" report compiled by the Inter-American Development Bank (IDB), 'competing stakeholders' for the Big Pond area, political wrangling and complications from "the unknown maze of underground utilities" are still raising more than a few question marks.
Vastly over budget and behind schedule, the New Providence Road Improvement Project has indeed become a political hot potato. In fact, the IDB "has facilitated the hiring of a public relations consultant to elaborate a communication strategy towards maintaining a positive perception of the project".
"In addition, given the pervasive nature of road closures and disruptions to the general public, there is an attendant reputational risk for the bank and the government alike," the report stated.
While the discovery of disruptive underground utilities, previously unmapped, has caused major problems and delays during excavation, it has further been revealed that the area of New Providence known as Big Pond is also of particular concern.
Sources familiar with the matter told Guardian Business Big Pond, located behind the new library at The College of The Bahamas, is begin sought after by various groups, including the college itself, the Bahamas Electricity Company and the Ministry of Youth, Sports and Culture.
The land itself is low-lying, sources said, meaning environmental groups might have something to say about its development. The IDB said "competing stakeholders are vying for use of the area defined as Big Pond, with the risk that a dispute can defer benefits of the project".
The bank is recommending a stakeholder meeting before designs and drawings are finalized on this stretch of work. Thirdly, in the report the IDB felt imminent elections and a change of government may "derail" the project and create more delays.
The report stated, however, that bringing about an "efficient end" to such a high-profile project will be high on the agenda of any administration.
According to the report, the government will negotiate an addendum to the contract leveraging liquidated damages to amend the basis of the inflation formula to hedge against a spike in oil prices.
Ryan Pinder, the PLP representative for Elizabeth, has often noted to Guardian Business this approach from the beginning would have saved millions of dollars.
Last week, Guardian Business reported on a speech made by Prime Minister Hubert Ingraham in the House of Assembly that declared the project had a funding gap of $77 million.
The government aims to borrow an additional $65 million from the IDB and cover the additional $12 million. The IDB is yet to formally approve this request. Jose Cartellone Construccionnes Civiles (JCCC) was originally contracted for the project in September 2008 for $119.9 million. Ingraham said the new projected cost of the road works is now $206 million.
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