In April 2006, we reported that USAID planned to construct and  rehabilitate 150 miles of paved road between Banda Aceh and  Meulaboh at an estimated cost of $245 million, or $1.6 million per  mile, with an estimated completion date of September 2009. USAID Constructed Road under Several Major Contracts, with Numerous Factors Delaying Completion

From August 2005 to September 2010, USAID awarded five contracts to  reconstruct the coastal road in Aceh Province, Indonesia—three contracts  for construction, one contract for design and supervision, and one  contract for project management. Lack of acceptable progress by  the priority contractor resulted in USAID’s reducing the scope of the  work, partially terminating the contract, and hiring a third construction  contractor to complete the unfinished work. Community opposition to the new road  alignment resulted in delays, according to USAID. USAID Took Several Actions to Ensure Quality of Indonesia Road Design and Construction but Lacks Quality Assurance Mechanism for Sections Still under Warranty

USAID’s actions to ensure the Indonesia road’s quality included, among  others, hiring an experienced project manager and requiring 1-year  warranties for completed road sections. In April 2006, USAID hired a U.S.-registered  professional engineer as its Project Manager for the entire road  construction project. Design and supervision. USAID’s Project Manager and Parsons inspected road sections during  construction, when construction was completed, and when the completed  sections were handed over to the Indonesian government following the 1- year warranty period. USAID officials in Jakarta told us in April 2012 that USAID was  considering rehiring the former Project Manager on an intermittent basis  to perform inspections of the approximately 50 miles of road sections  prior to expiration of the sections’ 1-year warranties. USAID Took Actions to Enhance Indonesia Road’s Sustainability, but Several Factors Could Decrease Its Life Expectancy

To enhance the Indonesia road’s sustainability, USAID designed and  constructed it to withstand heavy weights, included in the design several  features intended to minimize environmental impact, and provided  assistance to the Indonesian Directorate General of Highways (the  Directorate). However, the Directorate has not taken action to prevent the  construction of buildings and has not removed existing buildings that  have been constructed in the right-of-way. Such construction could  obstruct drainage channels and cause erosion and flooding. Agency Comments and Our Evaluation

We provided a draft of this report, as well as a video of our March 2012  inspection of the road, to USAID and State for their review. In addition, USAID concurred  with our recommendation that it ensure that road sections still under  warranty are inspected in a timely manner and that it require the  contractor to repair any defective sections. USAID concurred with the intent of our  recommendation that, to help ensure the road’s sustainability for the  intended 10 years, it should work with the Indonesian government to  develop and implement a process addressing factors that could affect the  road’s sustainability. We maintain  that it is essential that USAID work proactively with the Indonesian  government to develop and implement a process that addresses certain  factors, such as the use of overweight vehicles, construction in the right- of-way, and the creation of unauthorized access roads, that could affect  the road’s sustainability. Appendix I: Scope and Methodology

We reviewed the 91-mile road constructed by the U.S. Agency for  International Development (USAID) in Aceh Province, Indonesia,  following the December 2004 tsunami. Our objectives  in this report were to (1) describe USAID’s road construction operations  as well as factors that delayed the road’s completion, (2) assess USAID  efforts to ensure the road’s quality, and (3) examine factors that could  affect the road’s sustainability.
Why GAO Did This Study

In December 2004, an earthquake in the Indian Ocean caused a major tsunami that devastated several countries, affecting Indonesia most severely. In May 2005, Congress appropriated $908 million for aid to the affected countries. USAID budgeted $245 million of this amount to rehabilitate and construct a 150-mile paved coastal road in Aceh Province, Indonesia, with a planned completion date of September 2009. After reducing the projects scope, USAID completed a 91-mile road in April 2012 at an estimated cost of $256 million. GAO was asked to (1) describe USAIDs construction operations as well as factors that delayed the roads completion, (2) assess USAIDs efforts to ensure the roads quality, and (3) examine factors that could affect the roads sustainability. GAO reviewed USAID documents, interviewed USAID and Indonesian officials, and traveled the entire length of the road.

What GAO Found

From August 2005 to September 2010, the U.S. Agency for International Development (USAID) awarded five contracts to reconstruct a major coastal road in Aceh Province, Indonesia. Three of the contracts were for construction, one contract was for design and supervision, and one contract was for project management. Several factors delayed the roads completion and increased costs. For example, according to USAID, when one contractor did not make acceptable progress, the agency reduced the scope of work, terminated construction of an 8-mile road section, and hired another contractor to complete the section. Other factors included the Indonesian governments difficulty in acquiring land for the road and local opposition to the new road alignment.
USAID took several actions to ensure quality in the roads design and construction. For example, USAID hired an experienced, U.S.-registered professional engineer as Project Manager and hired a U.S.-based engineering firm to design the road and supervise most construction. USAID also required contractors to remain liable for any quality defects for 1 year after completing road sections. In addition, USAID required the Project Manager and the engineering firm to perform routine inspections, including final inspections when the warranties ended. Some inspections revealed poor-quality work that the contractors corrected. However, the engineering firms and Project Managers contracts ended in March 2012 and April 2012, respectively, leaving no qualified staff to inspect around 50 milesmore than half of the completed roadstill under warranty. USAID told GAO it is considering rehiring the Project Manager on an intermittent basis, but USAID has not finalized this arrangement and has no mechanism to ensure quality in these sections.
USAID also took several actions to help ensure the roads sustainability, such as designing it to withstand heavy weights and providing a maintenance plan and equipment to the Indonesian Directorate General of Highways. However, various factors could affect the roads sustainability for its intended 10-year design life. For example, according to USAID and Indonesian officials, the Directorate lacks resources needed to maintain the road. Also, according to USAID, the Indonesian government has not taken certain actions, such as using portable scales to prevent overweight vehicles that could cause pavement failure and prohibiting construction in the road right-of-way that could obstruct drainage.

What GAO Recommends

GAO recommends that USAID (1) ensure that road sections still under a 1-year warranty are inspected in a timely manner and require the construction contractor to make any needed repairs and (2) work with the Indonesian government to develop and implement a process addressing factors that could affect the roads sustainability. USAID stated that it concurred with GAOs first recommendation and concurred with the intent of GAOs second recommendation.
View a video of GAOs March 2012 inspection of the road. h ttp://www.gao.gov/multimedia/video#video_id=592299.