The Office of the Auditor-General has found that the Fiji Roads Authority Board approved and facilitated $405 million, via a flying minute, for capital road projects.
This is prior to the current board appointment in April 2023.
In a media conference, Minister for Public Works Ro Filipe Tuisawau said serious questions need to be asked whether proper processes, due diligence and approvals were undertaken before these amounts were being paid out.
Tuisawau said this is a very significant amount and exceeded the annual capital budget approved for each of the three years.
The findings of the Special Audit on FRA by the Office of the Auditor-General also highlighted that preliminary and feasibility studies were not carried out.
The report also highlighted that changes in the project scope after the tender was awarded, and a fresh tender was not called for, after significant changes to scope.
Tuisawau said under the maintenance program, there were inconsistencies noted in the application of cost escalation formulas applied by ‘Rip and Remake Contractors’.
He said that the OAG observed that the FRA accepted these cost escalation claims by the contractors and facilitated payments without independent verifications.
He said the retention fund owed to contractors were utilised by FRA due to its cash flow crisis.
“There was largely no allocation of specific budgets for emergency works arising out of natural disasters. Also, a significant number of key management and middle management positions remained vacant, which were critical to the functions of FRA during the reporting period.
The Minister said due to the seriousness of the findings in this special report and for transparency good governance… I will refer these findings to the FRA Board and to the relevant authorities for forensic investigations.
Background
Last year, the Ministry of Finance secured a $50 million overdraft facility to pay off arrears to FRA contractors amounting to over $40 million.
Tuisawau said with these payments, contractors were able to mobilise immediately and continue the required urgent maintenance works from May 2023.
He said that this triggered the board to commission a special audit, well-supported by the Government and the Office of the Auditor-General.
