The National Audit Office has criticised the Gozo Ministry for how it handled a major roadworks project in Nadur, saying that there was insufficient planning and poor management which resulted in the project being substantially more expensive than it should have been.

In a report issued on the Public Accounts this month, the National Audit Office (NAO) looked into the project covering an arterial road which starts from Triq l-Imġarr in Nadur, continues at Triq Borġ Għarib and ends at Triq Sant'Antnin, both roads in Għajnsielem.

The initial budget for the works in Triq l-Imġarr was set at €1.8 million after damages on the road resulted in the need for emergency works in order to keep it safe.

However, the NAO pointed out that the Gozo Ministry realised that it needed to enter into a second agreement with the contractor because the first "did not cater for the actual requirements of these roads, which were in a more precarious condition than expected."

By December 2023, the total road construction cost reached €17 million, while a further €1.5 million were incurred for other ancillary costs.

Back in March 2020, Minister Clint Camilleri had said that the project would cost €8 million.  The end result today was that the project went €10.5 million over budget.

The first contract was worth a total value of €652,207, but it was terminated after it became clear that the road was in a more precarious state than initially envisaged.

Following another call for tenders for the necessary works up to Triq Sant'Antnin, another contract was entered into with the same contractor for a total cost of €9.3 million. On the latter contract, several variations were made and since the limit of the allowable modifications was going to be exceeded. A third contract was signed with the same contractor for another €6.7 million to cover the remaining works.

The NAO's audit looked into whether public funds were used prudently and in a judicious manner. It noted that there were "significant delays" in the submission of information from the Ministry's end, and that the examined Bill of Quantities did not include detailed explanations of where the works were actually carried out.

That latter fact meant that the NAO could not assess whether allegations that the road contractors had carried out works in the adjacent private fields at the expense of public funds were true.

The NAO noted that when it conducted a site visit in September 2023 works in the adjacent fields, including a reservoir, ramps and rubble walls could be noted, but the lack of documentation meant that audits in this area "were deemed inconclusive." The Gozo Ministry has consistently denied these allegations.

The NAO noted "inadequate planning and disregarded Terrain Studies potentially leading to a substantial increase in costs" as one of the key issues which beset the project.

"Following road excavations which were carried out as part of the first contract (signed in August 2018), an agreement was reached between both parties to terminate this contract, since a significant amount of damage in drainage works and a weak terrain were discovered. By 26 February 2019, the Ministry had already paid €112,661 for the related excavation works, notwithstanding that it was not yet presented with a professional architect assessment report on the road terrain," the NAO noted.

It continued that in February 2019 a geotechnical engineer was contracted by the ministry for a period of two months "to provide a detailed design, addressing the stratigraphy, geomorphology and hydrology of Triq l-Imġarr, as well as assessing the current behaviour of the slope, for the cost of €94,400."

"In a press conference held in April 2019, with the then Minister for Gozo in attendance, the foregoing architect stated that the results indicated that the road design must align with the natural features of the surrounding landscape. A ground investigative report for the preliminary designs was presented in August 2019 at a cost of €18,880. However, the services of the foregoing architect were not utilised further," the NAO observed.

At the same time, the contractor engaged a company to undertake separate geotechnical ground investigations at Triq l-Imġarr. A report dated January 2020 concluded that excavation and piling works were expected to be of moderate difficulty, and routine mechanical excavation and piling means were to be used along the entire project. Another exercise was commissioned by the Ministry to the same company which was engaged by the contractor. The same terms of reference were given, but the sample was increased from 4 boreholes to 31. This exercise provided the same conclusion on 10 October 2020.

The variations to the main contracts with the road construction company, amounted to around €5 million. €420,000 of that was for the contractor to engage a technical team to carry out the structural calculations, designs, drawings and geotechnical consultancy; €1.9 million was for new items needed to carry out the project and another €2.4 million was for "repetition of works" - such expense not being covered by a formal addendum, although it was approved by the Department of Contracts.

The NAO recommended that when appointing technical consultants, the Ministry must ensure that any differences arising from the views of contractors' experts are resolved promptly, and a clear course of action is determined.

"Under no circumstances should a project proceed without such discussions, which outcome is to be duly documented. In this instance, it seems that the initial recommendations made by the Ministry's consultant were entirely disregarded," the NAO observed.

In its response, the Ministry said that "the foregoing architect was not utilised further because of a strategic decision aligned with the project's evolving needs and that, by adopting a design and build approach, the contractor assumes full responsibility for both the design and construction phases, as well as avoiding potential delays."

The NAO also noted that there were conflicting clauses in the same contract which could have led to additional costs.

One clause, the NAO noted, said that there wouldn't be any additional payments made if the foundation material type found during execution of works was different to what the contractor had assumed at tendering stage; but another clause in the same contract stated that the contractor could claim for variations to the tender if it encountered any unforeseen circumstances, such as but not limited to the bearing capacity of the road base or unknown underground water flow.

"The Ministry claimed that the circumstances encountered during the excavation process, when weak underlying foundations were identified, were unforeseen, and these necessitated the redesigning of the project. It was also stated that the project was to be executed on a design-and-build basis, to ensure the contractor's adherence to the respective maintenance obligations and defect liability commitments specified in the contract," the NAO observed.

"However, NAO has concerns on the reason for the abandonment of the plans suggested by the original architect and why the Ministry opted for the suggestions made by the contractor's consultant, which resulted in higher costs, since no documentation was provided to justify the change in plan," it added.

The NAO also found there was inadequate contract management, with some construction works not being covered by a signed agreement, almost five months of the works between August 2018 and January 2019 not being covered by an insurance policy, issues regarding work registers, and a lack of photographic evidence.

On the latter, the ministry noted that photographic records were kept in separate files to those handed to the NAO.