🔍 Inadequate due diligence on Dart-led consortium leads to project collapse

The recent failure of talks between the government and a Dart-led consortium, aiming to develop a waste-to-energy facility and waste management system at the George Town dump, has been attributed to a lack of due diligence. A report by Auditor General Sue Winspear revealed that the consortium chosen as the contractor may not have been fully qualified for the task. The report found no evidence of the government performing any checks on the contractor or its members. Furthermore, the parties involved in the project changed throughout the process, including significant changes to the consortium's contractors since the government's selection in September 2017. 📑

The report also highlighted that the Ministry of Health did not perform due diligence checks on the original or replacement members of the consortium, exposing the government to increased financial and reputational risk. The government failed to check the increase in price proposed by Dart when it was discovered that the original calculations on waste production were inaccurate. This led to a significant increase in construction costs, which were accepted by officials without verification. 📊

Despite spending millions on consultants to aid the negotiations, the government's excessive spending was criticised by the auditor general. The report revealed that the government hired outside consultants at a cost of $6.5 million, much of which exceeded estimated costs. These contracts were not budgeted for, and the contract awarded to the legal consultants did not follow a transparent or competitive process. The audit also found that the financial advisors did not perform a value-for-money analysis, a basic requirement in government policy, procedures and law. 💰