Cost of building roads shocking

National, Normal


ROADS are being built over a longer period of time and at a higher cost, and the authorities do not appear to have the ability or willingness to stop it.
They accept whatever costs are imposed by the industry, even if the contractors were supposed to complete the job by a certain time.
This was revealed by Lae-based regional Works manager Brian Alois at the Huon Seminar in Lae yesterday.
He said projects had been allowed to go beyond their completion dates and the costs had escalated to unbelievable levels.
“We have been accepting whatever costs imposed to us by the industry as true simply because we have no database to show, otherwise, there is no proof that road projects can be done at a lesser rate,” he said in his paper on the country’s road network system.
He revealed serious problems in the road infrastructure system and explained why development in rural areas had deteriorated to alarming levels, impacting also the inability of the Government to deliver to the bulk of the rural people.
He revealed how the cost of road construction and maintenance had increased sharply over the years to the point where more money was needed to maintain existing roads.
He called for government intervention to stop the costs of road works getting out of hand.
As an example, he said between 1994 and 1996, the cost of upgrading and sealing 1km of the road from the Malahang industrial centre to Bumayong in Lae cost K100,000.
Today, it would cost K1 million, an increase of 900%, he said.
“On the other hand, 10kg of rice cost K10 in 1996. Today, that same bag of rice costs K45 – an increase of 350%.
“Yes, the cost of living has increased but as we can see, thee increases bear no relation to each other and are not proportionate at all, yet we have accepted them.
“So when rates are falsified, exorbitant, less kilometres of road are improved. Then, we have to look for more money, we have to readjust the priorities in the budget to facilitate progress and in the end communities living at the very end of the line will continue to wait, and wait, and wait … or we will continue to work on priority roads for as long as it takes and for whatever it may costs without the bother of moving on to the non-priority roads such as provincial and district feeder roads.”
He added: “We have proof that in the road construction industry, there is an imbalance in the market where 50% of the road contracts have been awarded to only one contractor.”
Mr Alois said there was also failure in the market where projects were not delivered on time.
“These are symptomatic and symbolic of the collapse in the industry. In a bid to counter this problem in the industry another problem is created; bigger contractors bid, are awarded the contract, then engage small-time contractors as sub-contractors to do the job.
“What that means is that in order to accommodate the cost of the sub-contractor and still maintain their profit margin, these big contractors are increasing their bids.
“In these situations the effective cost to implement the projects are not the rate imposed by the main contractor but those applied by the sub-contractor.
“I strongly believe that the Government should consider an intervention into the road industry to improve the delivery of these projects and any future project for that matter,” he said.
Mr Alois said the bottomline was that projects must be completed on time and at reasonable cost.