7- MINISTRY OF PUBLIC INFRASTRUCTURE,
NATIONAL DEVELOPMENT UNIT,
LAND TRANSPORT AND SHIPPING
National Development Unit
General
The National Development Unit (NDU) operates to contribute towards the enhancement of
the quality of life through three main activities:
 Provision of community-based infrastructure and amenities.
 Implementation of land drainage programme.
 Provision of information, advice and related services to empower citizens.
The above activities are financed under the Programme “Community Based Infrastructure
and Public Empowerment” which has, as priority objectives, to improve the safety of
inhabitants in flood prone areas and enhance community welfare. One of the major services is
to provide an effective drainage system in flood prone areas, through the Land Drainage and
Watershed Management Programme.
To achieve its objectives, the NDU has divided the island in four zones. Rate contracts for the
construction and upgrading of roads and drains were awarded on a zonewise basis through
Open Advertising Bidding (OAB). As regards emergency projects, they were awarded to the
existing Zonal Contractors and other Contractors through the emergency procurement
method. A time frame of about six months was set for the implementation of the emergency
projects.
7.1 Planning and Managing of Projects
For the year 2013, NDU has incurred total expenditure of some Rs 1.71 billion out of the
revised budget of Rs 1.74 billion.
A sum of some Rs 1.16 billion was incurred for the Land Drainage Watershed Management
Programme out of the above total expenditure of Rs 1.71 billion. The expenditure exceeded
the approved budget of Rs 225 million under this Programme by more than 400 per cent. Part
of the additional provision of Rs 951.5 million obtained through Virement and under the
Supplementary Estimates was for implementation of emergency projects under the
Emergency Rehabilitation Programme (ERP) following the torrential rain of 13 February and
flash floods of 30 March 2013.
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Observations
Over the past years, NDU has undertaken more projects that were initially planned in the
budget but the financing requirements were not duly assessed. Following award of rate
contracts and emergency projects, Works Orders were issued as and when projects were
approved. The following were observed:
 Rs 1.16 billion comprised payments, among others, of Rs 586.7 million for emergency
projects awarded under the ERP and by the Road Development Authority (RDA) and
Rs 250 million for on-going projects awarded prior to 2013. As of 31 December 2013,
there were still commitments totalling some Rs 1.165 billion outstanding under these
projects as shown in Table 7-1.
Table 7-1 Payments and Outstanding Commitments as of 31 December 2013
Projects
Commitments
at 31.12.12
Rs million
Awarded in
2013
Rs million
Paid in
2013
Rs million
Emergency
Projects under
ERP
1,313.5
563.6
749.9
RDA Projects
62.9
23.1
39.8
250.0
375.6
836.7
1,165.3
On-going
projects prior to
2013
625.6
Total
625.6
1,376.4
Commitments
at 31.12.13
Rs million
As regards emergency projects under ERP, this situation should not have arisen in view
of the fact that all emergency projects awarded from February to May 2013 should have
been completed within the time frame of six months.
 A prioritised list of projects, targeted for 2013 comprising on-going and new projects
together with the estimated costs and implementing dates, had not been worked out. It
was also noted that:

When preparing the budget for 2013, NDU did not take into account the previous
years’ outstanding commitments of Rs 625.6 million.

Of 166 drain projects proposed for 2013, only 15 projects for an estimated cost of
Rs 75.2 million were awarded during the year 2013, out of which six were completed
and nine were still outstanding as of 31 December 2013.
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MINISTRY OF PUBLIC INFRASTRUCTURE, NATIONAL DEVELOPMENT UNIT, LAND TRANSPORT AND SHIPPING
Recommendations
 A realistic budget should be prepared, based on proper planning of projects which should
take into consideration all outstanding commitments from previous projects.
 Given that NDU spent significant funds in projects, it should urgently put into operation
the Project Management System that has already been developed to exercise proper
control and effective monitoring of projects and ensure their timely completion.
 NDU should monitor closely the issue of Works Orders under rate contracts so that the
financial resources allocated are sufficient to meet all commitments. This would help
NDU to minimize risks of not meeting its contractual obligations.
NDU’s Reply
NDU has taken note of the need for proper planning for drain projects. With the assistance of
the World Bank, a comprehensive study is being undertaken in flood prone areas to come up
with an Integrated Drain Plan to prevent flooding.
7.2 Zonal Contracts
A rate contract is awarded following an OAB and approval of the Central Procurement Board
(CPB) on the basis of approved rates to execute works as and when required. The quantities
in the scope of works are estimates and of indicative nature. Payments are based on actual
quantities of works measured jointly on site upon completion of works.
Four rate contracts for the construction and upgrading of roads and drains were awarded on a
zonewise basis (Zonal Contractors) by the CPB through OAB for a period of 18 months in
March 2012 and February 2013. Two of the four rate contracts, which expired in September
and October 2013 respectively, were extended up to May 2014. A total of 143 Works Orders
for a total amount of some Rs 504.2 million under the existing and extended contracts were
issued for the four zones in 2013.
The four rate contracts for a total value of Rs 713.6 million awarded to three Contractors A,
B and C are as shown in the Table 7-2.
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MINISTRY OF PUBLIC INFRASTRUCTURE, NATIONAL DEVELOPMENT UNIT, LAND TRANSPORT AND SHIPPING
Table 7-2 Zonal Contracts Awarded
Zone
Date of
Award
Contract Period
Contractors
Amount
Rs million
1
6 Mar 12
Mar 12 to Sep 13
A
180.8
2
4 Feb 13
Feb 13 to Aug 14
B
172.8
3
4 Feb 13
Mar 13 to Sep 14
C
203.8
4
6 Mar 12
Mar 12 to Oct 13
C
156.2
Total
713.6
Source: Project Files and NDU Database
Observations
Procurement proceedings for award of new contracts for Zones 1 and 4, which expired in
September and October 2013 respectively, were initiated by NDU through CPB in July 2013.
The estimated costs for Zones 1 and 4 were Rs 229 million and Rs 238.5 million respectively.
The procurement exercise was subsequently cancelled on the ground that international bids
had to be invited since the estimated contract cost per zone was more than Rs 200 million. It
was only on 22 April 2014 that a fresh tender exercise was launched.
Pending the award of new contracts, the existing contracts were extended on three occasions
to December 2013, March 2014 and May 2014. The amounts allocated to the two Contractors
A and C under the extended contracts for Zones 1 and 4 were however not specified. As of
28 February 2014, Works Orders amounting to Rs 99.2 million and Rs 102.1 million
respectively were already issued. These represented 55 and 65 per cent of the respective
existing contracts awarded in March 2012. This is not in line with Section 25 (2) (d) of the
Public Procurement Act (PPA) and Regulation 44(3) of the Public Procurement Regulations
(PPR) which stipulate that “the limit where additional works, which were not included in the
initial contract have, through unforeseeable circumstances, become necessary, shall be 30 per
cent of the initial contract value”.
Recommendations
 Bidding procedures should be properly planned so that new contracts are awarded before
the expiry of existing contracts. The estimated costs of the works, time required for bid
preparation and bid exercise should be carefully analysed before choosing the
procurement method and launching of bids.
 NDU should comply with the provisions of the PPA and PPR in particular, the prescribed
limit for any additional works entrusted to existing Contractors.
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MINISTRY OF PUBLIC INFRASTRUCTURE, NATIONAL DEVELOPMENT UNIT, LAND TRANSPORT AND SHIPPING
7.3 Emergency Rehabilitation Programme and RDA Projects
Following the torrential rain of 13 February 2013, the approval of Government was obtained
on 15 February 2013 for the urgent implementation of a number of projects in various
localities in Port Louis and neighbouring regions and other places such as Baie du Tombeau,
Bois Rouge, Pamplemousses, Fond du Sac, Cottage, l’Amitie and Gokhoola for dredging of
canals, repair of bridges, embankments and putting up of drain systems under ERP. NDU
awarded 47 projects for the sum of Rs 853 million from February to May 2013 under ERP I.
After the flash floods of 30 March 2013, giving rise to unprecedented flooding in Port Louis
and neighbouring regions, NDU undertook urgent maintenance and rehabilitation of drain
systems. NDU funded 19 projects of Rs 62.9 million, which were executed by the RDA.
Further, in order to prevent recurrence of flooding, 17 projects were awarded under ERP II
for Rs 460.5 million during the period March to May 2013.
As of 31 December 2013, a sum of Rs 586.7 million was incurred on 83 emergency projects
for a total contract value of some Rs 1.376 billion as shown in the Table 7-3.
Table 7-3 ERP and RDA Projects
Type of
Projects
Projects Awarded
Contract
Value
Rs million
Actual
Expenditure
Rs million
Number
Period
ERP I
47
Feb - May 13
853.0
377.7
ERP II
17
Mar - May 13
460.5
185.9
RDA
19
Feb - May 13
62.9
23.1
Total
83
1,376.4
586.7
Source: Project files
7.3.1 Financing and Approval of Emergency Projects
Government’s approval was needed for emergency projects as they were not budgeted.
Further, prior financial clearance has to be obtained from Ministry of Finance and Economic
Development (MOFED) on all requests made that would entail additional provision or
commitment of funds.
Observations
 11 projects under ERP I for a total value of some Rs 42 million were not found in the list
of emergency projects approved by Government on 15 February 2013. On 5 April 2013,
Government took note of progress in rehabilitation works following the flash floods of
30 March 2013. However, there was no approval of Government for the implementation
of ERP II projects and those executed by RDA estimated at Rs 523.4 million.
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MINISTRY OF PUBLIC INFRASTRUCTURE, NATIONAL DEVELOPMENT UNIT, LAND TRANSPORT AND SHIPPING
 On 10 and 30 April 2013, MOFED approved additional provision of funds amounting to
Rs 472 million for the implementation of emergency projects following floods in
February and March 2013. The funds were used not only for emergency projects related
to 2013 but also to finance similar projects awarded in 2011 and 2012.
 There were six cases where Works Orders totalling some Rs 70.9 million were issued
before financial clearance was obtained from MOFED. Further, in seven projects, Works
Orders for some Rs 194.4 million issued from February to May 2013 exceeded the
approved sum of Rs 69.8 million by Rs 124.6 million.
7.3.2 Allocation of Emergency Projects
Sections 21(1) and 21(2) of the PPA provide that “a public body may purchase goods, other
services or works from a single supplier without competition in cases of extreme urgency”
and that “the scope of the emergency procurement shall as far as possible be limited to the
period of the emergency so that appropriate competitive procurement methods may be
utilised at the conclusion of the emergency period” respectively. At NDU, a time frame of
about six months was set for the implementation of the emergency projects.
Following advice on emergency procurement sought by NDU in June 2013, the Attorney
General’s Office (AGO) stated that:
 with a view to ensuring transparency and in line with good practices although NDU may
resort to emergency procurement, nothing prevents an informal bidding exercise to be
carried out from amongst Contractors who have proven experience in carrying out such
works.
 most of the proposed emergency projects were within a specific zone and awarding the
projects to zonal contractors might raise concerns as to their capacity to carry out such
works within a short time frame.
Observations
All the contracts under ERP I and II for 2013 were awarded under Emergency Procurement.
In 2011, emergency contracts were awarded through restricted bidding as provided in Section
19.1 of the PPA.
For Zone 2, projects of total contract value of Rs 742.5 million were awarded to Contractor B
as of 31 December 2013. This figure comprised projects of Rs 172.8 million awarded under
the zonal contract in February 2013 and 17 emergency projects totalling some Rs 569.7
million were awarded without competition during the period February to May 2013. The
latter amount represented about 41 per cent of total contracts of Rs 1.376 billion under ERP.
Neither restricted bidding was resorted to nor were informal quotations sought from other
Contractors to ensure reasonableness of prices quoted by Contractor B before allocating
emergency projects.
Moreover, projects awarded to Contractor B were not completed within the contract period as
detailed below:
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MINISTRY OF PUBLIC INFRASTRUCTURE, NATIONAL DEVELOPMENT UNIT, LAND TRANSPORT AND SHIPPING
 Of the above mentioned 17 emergency projects awarded in 2013, eight of them
amounting to Rs 307 million were still not completed as of 31 December 2013. The
emergency period ranged from four to six months and was therefore exceeded by one to
four months.
 Six emergency projects of total contract value of Rs 48.3 million due for completion
during the period July 2011 to March 2013 were still not yet completed as of
31 December 2013. Delay in completion of works ranged from nine to 29 months.
Recommendations
 Financial clearance and Government’s approval should be sought before embarking into
emergency projects. Moreover, the value of Works Orders should not exceed the limits
approved by MOFED.
 NDU should ensure that projects awarded as emergency ones strictly fulfill the
requirements of the PPA. As such, the performance of Contractors should be monitored
closely so that all emergency projects are executed within the agreed emergency period.
 To ensure transparency in the process and in line with good procurement practices, NDU
should consider resorting to informal bidding exercises for emergency contracts as
advised by the AGO. A cost comparison exercise should be done taking into
consideration the reasonableness of prices quoted before award of contracts.
NDU’s Reply
 On 9 September 2013, clearance of MOFED was obtained for an additional amount of
Rs 87 million and on 13 December 2013, approval was obtained to provide additional
funds of the order of Rs 1,315 million.
 In view of the Government decision to give priority to projects under the ERP, it was
decided to implement drains projects under the normal programme at a later stage.
 Setbacks were experienced for the implementation of emergency projects in terms of
difficulties to obtain wayleave, need for acquisition of land, relocation of services;
consequently, there was revision in the completion of projects.
7.4 Non Compliance with Conditions of Contract
Out of 49 projects, a sample of 17 of a total contract value of Rs 284.8 million was examined.
Instances of non compliance with conditions of the contract are shown below:
Performance Security
According to General Conditions of Contract (GCC), the Contractor is required to provide a
performance security of 10 to 15 per cent of the Contract Price, which shall be from a local
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MINISTRY OF PUBLIC INFRASTRUCTURE, NATIONAL DEVELOPMENT UNIT, LAND TRANSPORT AND SHIPPING
commercial bank approved by the public body and shall be valid up to the issue of the
Defects Liability Certificate for the works.
 The performance securities for two projects were not adjusted to reflect increase in
contract value due to additional works entrusted to the Contractors.
 In three cases, the performance securities were not extended to cover the Defects Liability
Period in respect of works, which were not completed within the contractual period.
 For six projects, the NDU accepted performance securities issued from an insurance
company instead of a local commercial bank.
Programme of Works
According to GCC, the Contractor shall submit for approval a Programme of Works within
seven days from the date of the Works Order. For four projects, the Programme of Works
was submitted from four to 11 months after the issue of the Works Order; and in four cases,
these were not submitted at all.
Extension of Time
According to GCC, the Contractor shall at latest, within a period of seven days after
completion of works request the Project Manager to extend the Intended Completion Date. If
the Contractor fails to give early warning of a delay, same shall not be considered in
assessing the new Intended Completion Date. In three projects, no early warning was given
by the Contractor. Nevertheless, extension of time was approved by the Project Manager.
Further, the additional time granted was not supported by documentary evidence, such as
weather report.
Practical Completion
According to GCC, the Contractor shall request the Project Manager to issue a Certificate of
Completion of works, within 28 days from the date on which the works were actually
completed on site. Certificates of completion of works were issued four and six months after
the completion of two projects instead of 28 days. For another six projects that were
completed, no practical completion certificates were issued.
Liquidated Damages
According to the Particular Conditions of Contract, the Contractor shall pay liquidated
damages to the Employer at the rate of Rs 5,000 per calendar day for each day that the
completion date is later than the Intended Completion Date. Liquidated damages were not
claimed for three projects although there were delays in the completion of works.
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MINISTRY OF PUBLIC INFRASTRUCTURE, NATIONAL DEVELOPMENT UNIT, LAND TRANSPORT AND SHIPPING
Test Results
According to the internal circulars of NDU issued in February 2013, all test results should be
submitted by the Contractor at the appropriate time period when the item of work is being
performed. Further, as per Contract for road works, standard tests shall be carried out by the
Contractor.
For one project, the sample sizes for “in-situ density tests for areas under vehicular traffic
loading and asphalt wearing course” and for “the diameter and thickness of coring of
asphaltic wearing course” should have been 25 instead of 17, and 17 instead of eight
respectively. No instruction was seen for a lesser sample. Further, no test reports were
attached to the payment certificates for two other projects.
Recommendations
All terms and conditions of the contracts and internal circulars should be strictly complied
with. NDU should ensure that liquidated damages should be claimed where there are delays
in completion of contracts and that test results reports are submitted prior to payments.
NDU’s Reply
 It will be ensured that no contracts or work order would be issued without submission of
performance security. In case of non submission of performance security, it is
contemplated to withhold a specific amount of money from subsequent payment to
constitute the amount required for performance security.
 Necessary measures will be taken to ensure that Contractors comply with the conditions
of contract.
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MINISTRY OF PUBLIC INFRASTRUCTURE, NATIONAL DEVELOPMENT UNIT, LAND TRANSPORT AND SHIPPING
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MINISTRY OF PUBLIC INFRASTRUCTURE, NATIONAL DEVELOPMENT UNIT, LAND TRANSPORT AND SHIPPING