A REPORT commissioned by the National Housing Development Corporation (NHDC) which manages Operation PRIDE projects indicates that 10 of the more than 100 schemes are likely to exceed their budget by a whopping $5.5 billion.A closer look at three of the schemes reveals massive over expenditure and completion deadlines that have not been met. The 10 schemes had an initial contract of $1.7 billion but are now estimated to cost $7.2 billion.
In the case of Pleasant Heights which was contracted to Brown Well, 433 housing units were to be provided at a cost of $191 million, of which $9.5 million has already been spent.
According to the report however, if work progress remains the same, the projected cost to completion would be $381 million.
The project started in September 1999, with a scheduled completion date of March 1999. As at December 2001 the project was dormant. "If there are no changes to work progress the project will be completed in six years," the report said. At that time, the price of housing units that were slated to cost $441,108 would escalate to $879,907.
An important component contributing to the high project costs has been the consultants/professional fees. In the case of Pleasant Heights, these accounted for 5.8 per cent of the contract sum.
In the case of Retirement phase two, the auditors found that the project, with a contract value of $120 million is likely to end up costing $267 million if the progress of the work remains the same. To date, $53.4 million has been spent on the site.
The project started in May, 1999 with a scheduled completion date of November 2002. As at December 2001, the project was 28 per cent behind schedule. If there are no changes to work progress the project will be completed in June 2003. Housing units which at the time of the contract signing were expected to cost $387,096, will by that time be sold for $861,290.
Consultants/professional fees were said to have also contributed to the high projects costs associated with the Retirement 2 scheme. These accounted for 16 per cent of the contract sum. According to the report, $8.5m could be saved by reducing the number of consultants on the project without affecting its integrity.
