Minister for Public Works, Transport and Meteorological Services, Ro Filipe Tuisawau

A forensic and detailed investigation is now the next step into the alleged mismanagement of funds and contracts within the Fiji Roads Authority.

Minister for Public Works, Transport and Meteorological Services, Ro Filipe Tuisawau presented the findings of the special audit undertaken by the Office of the Auditor General into FRA today.

He says the findings is for a three-year period from July of 2020 until the same month of 2023 and the total cost of variation and escalation was at $405 million.

Amongst issues highlighted in the report, it includes changes made to figures and contracts without proper processes.

Ro Filipe says FRA also did not have capital funds to operate as the authority had fully utilized its 2022/2023 capital budget allocation in just five months, ending December 2022.

He says with no funds, it worsened with the arrears owed to its contractors.

“The board had no choice but to make immediate steps to address this crisis situation and with collaboration and approval by the line ministry and the Ministry of Finance secured a $50 million overdraft to pay off arrears to our contractors, amounting to over $40 million. With this payment, contractors were able to mobilize immediately and continue the required urgent maintenance works from May 2023 to date. This also triggered the board to commission a special audit well supported by government and the Office of the Auditor General.”

The Minister says serious questions need to be asked whether proper processes were followed before the amounts were paid out.

“The summary findings number one that the total cost variation and escalation of $405 million were largely facilitated and approved by the former board via flying minutes. This is a very significant amount and exceeded the annual capital budget approved for each of the three years. This amount is equivalent to about 10% of the national budget.”

Amongst issues highlighted in the report, it includes changes made to figures and contracts without proper processes.

“For example, some examples, original contract was $59.1 million revised $100.7 million, cost overrun $41.5 million another project $65.9 million, original contract revised $118.4 million, cost over on $50.9 million , $61.9 million original contract revised 65.7 cost overrun $3.7 million.”

Ro Filipe says the findings also indicate that preliminary and feasibility studies were not carried out.

He adds it also reveals that there were changes in scope after tender was awarded and fresh tender was not called for significant changes to scope.

The Minister says under the maintenance project there were inconsistencies in the application of cost escalation formulas applied by Rip and Make contractors.

He says the OAG observed that FRA accepted these cost escalation claims made by the contractors and facilitated payments without independent verifications.

The investigation into FRA started in June last year and the Chief Executive Kamal Prasad was also sent on leave pending the audit and investigations.

Kamal Prasad

Ro Filipe today confirmed that Prasad has been terminated.