USAID’s OIG recently released its audit of the Juba-Nimule road. This was USAID/Sudan’s major road infrastructure activity in scope, cost, and the priority accorded to it by Government of Southern Sudan. The report says that the road originally built from 1928 to 1932, was upgraded to gravel standards in the early 1970s but was neglected for more than 22 years of civil war. The road connects Juba, the seat of the southern Sudanese government, with Uganda. From there, the road provides access to Kenya and the port of Mombasa.
Quick summary from the report:
USAID/Sudan’s major road infrastructure activity is upgrading the 192 kilometer Juba-Nimule road from a gravel road to a paved road. The main goals of the Juba-Nimule road project are to foster economic growth by increasing capacity for trade, facilitating refugee resettlement and the transportation of humanitarian aid, and strengthening southern Sudanese capabilities in road maintenance and construction. This activity is one initiative under the Sudan Infrastructure Services Project, a 5-year, $700 million indefinite quantity contract1 through September 2011 with the Louis Berger Group, Inc.
The project is currently 8 months behind schedule, primarily because policy questions arose during procurement of the main road construction subcontracts. Moreover, the total cost has risen from an estimated $87 million in the road’s feasibility study to the current estimate of $163.8 million. This increase was due to a number of factors, including erroneous assumptions and a lack of technical data in the feasibility study. Problems in bridge construction also contributed to higher costs. Finally, the audit determined that (1) none of the people interviewed along the Juba-Nimule road were aware that this road was being financed by the United States and (2) several contracts between the Louis Berger Group, Inc., and its subcontractors omitted required antiterrorism language.
Excerpts from the audit:
- The completion of the Juba-Nimule road was initially planned for March 2010. However, current estimates place the completion date in November 2010. This delay was caused principally by policy questions that arose during the procurement of the road construction subcontract. As a result of this delay, the overall estimated cost of the Juba-Nimule road increased by more than $7 million.
- Federal law requires reasonable cost estimates before USAID initiates certain projects. Despite this requirement, the projected cost of the Juba-Nimule road increased 88 percent over the estimate in the road’s feasibility study. A major portion of this increase arose from the absence of sufficient technical data, which resulted in an underestimate of the material required. Moreover, erroneous initial assumptions also contributed to the increased projected costs. As a result, the road is costing millions of dollars more than originally estimated, and USAID operational planning was hindered.
- The May 2007 feasibility study for the Juba-Nimule road, which was prepared by the Louis Berger Group, Inc. (Berger), and was completed prior to the initial obligation of funds under Task Order 2, estimated a maximum total cost of $87 million for upgrading the road to a double bituminous surface treatment standard. However, as of April 6, 2009, the road had an estimated budget of $163.8 million, or an increase of 88 percent over the amount in the feasibility study.
- The planned completion dates for the erection of seven new bridges along the Juba-Nimule road were not met because of delays in foundation construction, which was exacerbated by poor initial designs. A significant cause of these problems was the lack of timely geotechnical data. As a result, overall project costs have increased, and USAID could ultimately bear the cost of potential claims for losses.
- Effective branding of USAID projects is an important Agency objective. However, none of the people interviewed along the Juba-Nimule road were aware that the project is being funded by the United States. This occurred because community leaders were not disseminating this information to the grassroots level. […]The ineffectiveness of the current branding strategy means that people in southern Sudan are generally not aware that the Juba-Nimule road is being funded by the American people. Consequently, opportunities to create positive impressions of the United States are forfeited, hindering public diplomacy efforts in Sudan, an area of immense foreign policy interest to the United States. (italics added)
- USAID regulations mandate that recipients of USAID assistance include in all subawards a provision based on Executive Order 13224 designed to prevent the financing of terrorist activities. Nevertheless, 6 of 15 subcontracts for the Juba-Nimule road did not contain this provision. This likely occurred because contractor officials mistakenly relied on other terrorism-related clauses and used templates that omitted the required language. Consequently, USAID funds could be at increased risk of being used to finance terrorist activities. (italics added)
USAID/OIG: Audit of USAID/Sudan's Road Infrastructure Activities | AUDIT REPORT NO. 4-650-09-009-P | September 28, 2009 | PDF
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