Roads directorate still opting to commission works - NAO

The Roads and Infrastructure Directorate (RID) is still opting to commission works, a follow-up on a performance audit report by the National Audit Office (NAO) has found out.

The NAO has identified a number of prevailing and emerging concerns which, in its opinion, significantly undermine the Directorate's efficiency and effectiveness while impinging on economical considerations.

"The predominant emerging concern relates to the issue of RID opting to commission works through the emergency works provision allowed under the Framework Agreement (which governs the procurement of asphalting interventions)," the NAO said.

"While this provision requires works to be carried out outside normal working hours, it also allows for a fifty per cent mark-up on agreed prices."

In availing itself of this proviso, RID intended to address consistent contestations by contractors on price levels as quoted in the Framework Agreement. In addition, in using such a system, road users also benefited from reduced inconvenience since works were carried out during night hours.

NAO was however concerned about the fact that the mark-up permissible under this provision is, significantly higher than the results of a report compiled by external consultants (who were commissioned by RID) intended at determining fair and reasonable prices for the works in question.

"NAO estimates that, in the case of the forty-four contracts for works which were procured in this manner (since the implementation of the Framework Agreement) and reviewed by this Office, the difference between the rates as validated by RID's

commissioned consultants and the higher mark-up permissible in the emergency works provision, approximates €400,000."

Two principal concerns recur from the 2011 audit report. NAO once again observed that, in the majority of competitive tenders issued by the Directorate, individual tenders were still attracting a single bidder each.

"Such state of affairs poses risks on possible economical benefits usually associated with a normal competitive tendering process from which the Directorate might stand to benefit.

"In addition, such a situation also raises concerns on the competitive behaviour of the bidders in question. Furthermore, this Office also noted that performance guarantees were not solicited by RID from contractors engaged in emergency works, thereby presenting axiomatic risks to the Directorate."

The overall standard and quality of roads in Malta are considered to be of widespread national interest for varying reasons, particularly due to health and safety considerations as well as the practicality and efficiency of the population's daily mobility.

To this end, following the publication of the Performance Audit report in March 2011, the Auditor General deemed it fit to conduct a follow-up study to assess whether the concerns highlighted in the original report were adequately addressed.

As a consequence, NAO once again reviewed the operational systems of the RID, being the entity assigned with the responsibility to repair and maintain the local arterial and distributor road network.

While conducting its review, this Office has also taken into account other considerations which emerged during the period in between the two NAO studies.

After conducting its review, NAO was positively impressed by significant improvements to the Directorate's operational systems. Among others, NAO commends RID for the efforts invested in streamlining the process by which road surface defects are identified and logged for consequent processing and prioritisation. This Office also noted the "evident" improvement in the traffic management system as well as the enhanced approach to the monitoring routine adopted during the progression of the reviewed works.

In addition, whereas contracts reviewed during the 2011 exercise allowed the engaged contractors to forego skid resistance specifications, NAO positively noted that no such allowance was found in the works reviewed for this follow-up audit.

These issues are comprehensively addressed, along with others, in the performance audit report entitled 'Road Surface Repair Works on the Arterial and Distributor Road Network - Follow-up'. A number of recommendations which could assist RID in mitigating the identified concerns also feature in this study. This audit report may be accessed through the NAO website: www.nao.gov.mt.