By Claude Mills and Devon Evans, Staff ReportersSEGMENT TWO of the North Coast Highway, which is now scheduled to be completed one year after the original June 2004 deadline, will cost taxpayers an additional $2 billion (US$35 million) in cost overruns when completed.
Desmond Malcolm, project director for the North Coast Highway, told The Gleaner yesterday that the project is now estimated to cost US$120 million because of a number of factors such as land acquisition, relocation of utilities, resettlement of populations, and the attendant contractor overheads associated with the one-year delay. It was originally estimated to cost US$80 million.
"There were a number of difficulties in acquiring land, some of which we did through compulsory acquisition, lengthy negotiations, and in some cases through legal action, so our costs had escalated beyond the initial projected costs," Mr. Malcolm explained.
The highway, which covers 97 kilometres from Montego Bay, St. James, to Ocho Rios, St. Ann, is being done in various segments. Segment Two is 55 per cent complete.
According to Mr. Malcolm, José Cantellone Civiles, the Argentine contractors, will account for US$8 million of the projected US$35 million cost overrun.
"There were various offsets here and there but the fact that the project was extended by one year, there will be attendant costs in terms of contractor overhead in the vicinity of US$8 million," he said.
COMING DOWN HARD
In the meantime, Dr. Fenton Ferguson, the Minister of State in the Ministry of Transport and Works, has warned that the Ministry will be coming down hard on the contractor to have the work completed on time.
Dr. Ferguson said there were a number of planned developments that are awaiting the completion of the highway, including the proposed Greenfield Stadium in Trelawny and a number of new hotel projects.
"Our expectation though are that the activities of segment two will gradually step up as there are some four bridges that are being worked on which will be completed about July," he said.
Attorney-at-law Ronnie Thwaites, who is representing José Cartellones, explained that "from the contractors' side, one of the main difficulties has been the adjustment of utility services to facilitate the project."
"The contractors regret the delays which means that equipment is not used at its optimal level, and so the job is less profitable. The contractors maintain that they have had a good working relationship with the public agencies involved in the project and their sole purpose now is to complete this project," Mr. Thwaites said.
Mr. Malcolm admitted that there had been many problems with the relocation of utilities.
"One of the conditions for the execution of the project was that those lands and relocation of utilities should have taken place by the time the contractor was ready to start working. Further, the cost to relocate utilities, has proven to be very costly to the government, as some of the lands acquired were prime lands".
