SHAL­IZA HAS­SANALI

Ram­pant in­ef­fi­cien­cies in the Wa­ter and Sew­er­age Au­thor­i­ty (WASA) project man­age­ment de­part­ment have led to the be­lea­guered State-owned com­pa­ny over procur­ing $81 mil­lion in pipelines they may not have need­ed.

This was just one of the shock­ing find­ings con­tained in a 35-page re­port by WASA’s In­ter­nal Au­dit Com­pli­ance De­part­ment (IACD) in­to the au­thor­i­ty’s pro­cure­ment of 38,480 lengths of pipes val­ued at $223 mil­lion from Chi­nese based firm Xin Xing Duc­tile Pipes Com­pa­ny Ltd since 2013. The 38,480 pipes cov­er a dis­tance of 235.14 kilo­me­tres and it marked the largest pur­chase in WASA’s his­to­ry.

The pipes were bought for the ex­e­cu­tion of 28 projects geared to­wards im­prov­ing WASA’s re­li­a­bil­i­ty and reg­u­lar­i­ty of its pipe-borne sup­ply to its 400,000-plus cus­tomers.

Eight years lat­er, how­ev­er, the re­port, dat­ed Sep­tem­ber 16, 2021 and ob­tained by Guardian Me­dia, has found that 16 of the 28 projects are still in­com­plete af­ter mil­lions of tax­pay­ers’ dol­lars have been spent.

The re­port al­so un­cov­ered dis­crep­an­cies in the pro­cure­ment process for the pipes, ir­reg­u­lar­i­ties in the short­list­ing and eval­u­a­tion pro­ce­dures and lack of due dili­gence by WASA’s man­age­ment.

The au­dit con­clud­ed that every as­pect of WASA’s project man­age­ment cy­cle had been plagued with in­ef­fi­cien­cies which re­sult­ed in the over pro­cure­ment of pipes val­ued at $81,284,659.74

The fact that 16 projects had not been ex­e­cut­ed, the re­port stat­ed, demon­strat­ed the au­thor­i­ty’s in­abil­i­ty to ex­e­cute projects with­in planned time­frames, while man­age­ment did not have the au­ton­o­my and abil­i­ty to de­ter­mine the pri­ori­ti­sa­tion of projects.

“The au­thor­i­ty’s fail­ure to ad­e­quate­ly con­cep­tu­alise projects re­sult­ed in pipes be­ing pro­cured for 10 projects that are no longer re­quired. The IACD is of the opin­ion that the con­trols over the pro­cure­ment of the iron pipes were un­sat­is­fac­to­ry,” the re­port dis­cov­ered.

Pub­lic Util­i­ties Min­is­ter Mar­vin Gon­za­les or­dered the IACD to com­mis­sion the au­dit in March, in or­der to ver­i­fy whether there was a le­git­i­mate need for the num­ber of pipes pro­cured, the rea­son for a large num­ber of un­used pipes in stock and as­cer­tain if the pro­cure­ment process was ex­e­cut­ed as an arm’s length trans­ac­tion.

A re­view of the de­tailed re­port showed WASA pur­chased the pipes un­der the then Peo­ple’s Part­ner­ship ad­min­is­tra­tion.

Fund­ing for the projects was al­lo­cat­ed un­der the 12-month Wa­ter De­vel­op­ment Plan and In­fra­struc­ture De­vel­op­ment and Con­sol­i­dat­ed Funds from the T&T gov­ern­ment.

The pipes, rang­ing in di­am­e­ters eight to 43 inch­es, were de­liv­ered to WASA in five tranch­es be­tween March 2013 and May 2014 and the av­er­age cost per pipe was list­ed at $5,801.

Apart from the over pro­cure­ment of the 16,045 pipes, the au­dit showed that two projects, name­ly Ca­roni Du­alling from Cou­va to San Fer­nan­do and Na­pari­ma/Ma­yaro Road, were nev­er ex­e­cut­ed but es­ti­mat­ed to use 8,167 pipes val­ued at $61,067,787.56.

“It ap­pears that the au­thor­i­ty pro­cured 873 pipes val­ued at $5,064,814.26 in ex­cess of the quan­ti­ties ap­proved by the TC (Ten­ders Com­mit­tee) at the 219th and 225th meet­ings. The TC ap­proved the pro­cure­ment of 37,607 pipes, yet 38,480 pipes were pro­cured.”

The re­port stat­ed that “the for­mer Head, Wa­ter Projects ex­plained that since Xin Xing’s cost was less than the au­thor­i­ty’s es­ti­mate (38 per cent) spare pipes were al­so pur­chased for re­pairs and fu­ture projects. How­ev­er, this was not ad­e­quate­ly jus­ti­fied via votes to the TC.”

Al­so, 8,883 pipes priced at $26,045,566.41 were al­so pro­cured for ten projects that were no longer re­quired.

Of these projects, four were com­plet­ed pri­or to re­ceipt of Xin Xing’s pipes and should not have been in­clud­ed in the 28 projects.

Pipes were al­so pur­chased for six oth­er projects, three of which had been du­pli­cat­ed, while an ad­di­tion­al three were can­celled/dis­con­tin­ued. WASA spent $6,322,947.56 on 1,650 pipes for the three du­pli­cat­ed projects.

“This brings in­to ques­tion whether man­age­ment was neg­li­gent or de­lib­er­ate­ly mis­led the TC when re­quest­ing ap­proval for the quan­ti­ties of pipes re­quired,” the re­port stat­ed.

The re­port cit­ed two projects—Beetham/Sea Lots and Cas­tara to Run­nemede—that did not re­quire pipes as con­firmed by the for­mer head of Wa­ter Projects, yet 1,250 pipes val­ued at $3,294,898.58 were pro­cured for the projects.

“It should be not­ed that the for­mer Head, Wa­ter Projects sub­se­quent­ly con­tra­dict­ed him­self by in­di­cat­ing that the Beetham/Sea Lots project was ex­e­cut­ed at a re­duced scope but no doc­u­men­ta­tion was pro­vid­ed to sub­stan­ti­ate this claim,” the re­port found.

The re­port dis­cov­ered that one project —South Cen­tral Road—which had been dis­con­tin­ued was es­ti­mat­ed to use 983 pipes, hav­ing an ap­prox­i­mate val­ue of $3,499,615,25.

Fur­ther analy­sis al­so showed that 12 com­plet­ed projects used 1,878 pipes less than what was es­ti­mat­ed.

Among the 12 projects is the Ca­roni Du­alling South Trans­mis­sion Main project, which is now 91 per cent com­plet­ed af­ter start­ing in 2017.

“Based on doc­u­men­ta­tion re­ceived from the ex­e­cut­ing de­part­ment, al­though an es­ti­mat­ed $289,412,088.89 of tax­pay­ers’ dol­lars has been spent to date, of which $89,307,528.52 is for iron pipes, there is no con­firmed plan to com­plete this project.”

It al­so found that as of May 2021, WASA had not used 24,269 of the pipes val­ued at $80,113,234.68 which are cur­rent­ly stored in Freeport, Ca­roni, Carlsen Field and two ar­eas in To­ba­go.

“IACD was un­able to ac­cu­rate­ly rec­on­cile and val­i­date the ac­tu­al quan­ti­ties of pipes that were used in the 28 projects. Util­is­ing the Ex­e­cut­ing De­part­ment’s records, 16,550 pipes were cal­cu­lat­ed to be on hand. The vari­ance of 7,719 lengths val­ued $44,782,704.78 be­tween In­ven­to­ry (Or­a­cle) and the Ex­e­cut­ing De­part­ment’s records, may have re­sult­ed from in­ad­e­quate and in­ac­cu­rate project records,” the re­port found.

The re­port at­trib­uted that oth­er con­trol de­fi­cien­cies would have con­tributed to the vari­ances.

In re­view­ing the pro­cure­ment process, the IACD picked up sev­er­al dis­crep­an­cies which brought in­to ques­tion whether “the process was con­duct­ed at arm’s length.”

Based on their in­ves­ti­ga­tions, the au­dit found the Ten­ders Com­mit­tee and the board did not ex­er­cise due dili­gence in re­quest­ing ad­e­quate sup­port from man­age­ment to make in­formed de­ci­sions.

Ir­reg­u­lar­i­ties were al­so iden­ti­fied in the short­list­ing and eval­u­a­tion process.

“The de­fi­cien­cies not­ed in the pro­cure­ment process pos­si­bly im­paired the trans­paren­cy and eq­ui­ty of the ten­der­ing process, neg­a­tive­ly im­pact­ed the qual­i­ty of pipes pro­cured and pre­vent­ed the au­thor­i­ty from at­tain­ing val­ue for mon­ey for WTC 46/2012,” the au­dit re­port said.

The re­port con­clud­ed that the ten­der­ing process for the pro­cure­ment of the iron pipes was de­fi­cient, since the se­lec­tion team failed to use the pre­qual­i­fi­ca­tion cri­te­ria un­der WTC 137/2011. The man­age­ment team at the time jus­ti­fied the cir­cum­ven­tion of the same, as three pack­ages of the WTC on­ly had two com­pli­ant bid­ders, which is the min­i­mum re­quired to fa­cil­i­tate a com­pet­i­tive e-auc­tion. How­ev­er, the re­port point­ed out, this did not jus­ti­fy cir­cum­ven­tion.

“This not on­ly im­paired the trans­paren­cy and eq­ui­ty of the pro­cure­ment process but pos­si­bly lim­it­ed the au­thor­i­ty’s se­lec­tion of the most suit­able sup­pli­er.”

The au­dit al­so picked up sev­er­al vari­ances be­tween the pipes that were pur­chased and WASA’s in­ven­to­ry records.

To ad­dress the de­fi­cien­cies, the IACD put for­ward sev­er­al rec­om­men­da­tions. One rec­om­men­da­tion was that act­ing CEO Sher­land Shep­pard con­sid­er util­is­ing the pipes in stock for fu­ture projects and re­vise its eval­u­a­tion process and records man­age­ment in readi­ness for the im­ple­men­ta­tion of the Pub­lic Pro­cure­ment and Dis­pos­al of Pub­lic Prop­er­ty Act 2015.

“It should be not­ed that the de­tailed is­sues were raised with the rel­e­vant man­agers for cor­rec­tive ac­tion and will not be in­clud­ed as part of the out­stand­ing Au­dit Rec­om­men­da­tions. How­ev­er, it is ex­pect­ed that cor­rec­tive ac­tion will be tak­en to im­ple­ment rec­om­men­da­tions in the short­est pos­si­ble time frame.”

Con­tact­ed on the au­dit re­port, Min­is­ter Gon­za­les said for weeks he has been pon­der­ing how best he can utilise his time to ad­dress the ills that oc­curred in WASA over the years,“in­clud­ing the pipeline de­ba­cle and scan­dal.”

“I think the pub­lic in­ter­est, at this time, will be bet­ter served by putting all the un­used pipeline to use to im­prove trans­mis­sion and dis­tri­b­u­tion of wa­ter, es­pe­cial­ly in ar­eas where there are high leak­age lines,” he said.

He said many of the play­ers who were in­volved “in this scan­dal are no longer in the au­thor­i­ty and the trans­for­ma­tion will ad­dress the in­ter­nal short­com­ings that fa­cil­i­tat­ed this egre­gious and vex­ing state of af­fairs.”

Hav­ing seen the pipes, which are hid­den from the glare of the pub­lic, some rot­ting away, Gon­za­les said, “It struck me that past ex­ec­u­tives were nev­er in­ter­est­ed in solv­ing the coun­try’s wa­ter cri­sis but used WASA as a cash cow to line their pock­ets.”

Gon­za­les said this fi­as­co went on for years “un­de­tect­ed” with no an­swers in sight.

“I was not get­ting sat­is­fac­to­ry ex­pla­na­tions from pre­vi­ous man­age­ment. Now that a spe­cial au­dit is com­plet­ed the find­ings are clear and star­tling,” he said, adding he will en­sure that every piece of un­used pipeline is placed in the ground to im­prove T&T’s wa­ter sup­ply for cit­i­zens.

Pressed on if he will re­fer the au­dit to the T&T Po­lice Ser­vice for an in­ves­ti­ga­tion, Gon­za­les did not re­spond.