HOSTING AU SUMMIT COST OVER E137M

MBABANE – A pipe dream by the country, of hosting the African Union (AU) Summit in 2020, cost the country over E137 million.

In actual fact, this is another expense that resulted in the cost of the International Convention Centre (ICC) escalating. The prospects of hosting the AU conference required that there be variations to the initial scope of works to accommodate specific AU requirements in the design.

The cost of the ICC increased by E137 500 138.01.
Initially, the Ministry of Economic Planning and Development had projected that the cost to construct the ICC would be E1 764 941 021.99. However, due to the alterations, the contract value of the structure reached E1 902 441 160.

Initially, when the ICC was commissioned, it was with the view that it would stimulate the tourism sector. Also, it was envisaged that it would reap the economic benefits of the meeting, incentives conferences and exhibition industry.

This led to the Five Star Hotel (FISH) being developed to complement the ICC.
This is contained in the Ministry of Economic Planning and Development first quarter report, July 2019. The ministry reported that challenges at the ICC included the outstanding works which were made of interior works fit-out, works to the structure and shell that can only be done once the interior works fit-out is defined and specified.

Also, it cited that government was not in a good position to finance the project given the fiscal challenges. To avoid further delay to the completion of the project, government has since applied for an additional loan from the Export-Import Bank of the Republic of China (Taiwan) amounting to E1 159 435 550.64 (USD 83 018 441.26).

On the other hand, the contract value of the FISH has escalated to E2.151 billion. The initial cost of the project had been set at E1 801 769 560.76 – that was in July 3, 2017 and it was set to be completed by December 13, 2019.
It was reported that the overruns were due to an increased cost from the time of tender in 2015 to 2019 for the provisional sum items as the mechanical works equipment.

The report stated that to date, the work done and completed amounted to E1 001 270 193. When comparing this amount, with the outstanding work on the site amounts to E150 366 148.83.

Value

“The available funds will finance the FISH Project up to the value if E1 311 296 175. The additional funding required is, therefore, E840 340 166.83,” reads in part the report.

Recently, the Minister of Economic Planning and Development, Dr Thambo Gina, gave the nation assurance that the construction of the works of the hotel and conference centre at Ezulwini would be completed by December 2020. However, there was still a lot of money that was needed for the project.
Also, in the event that financial challenges continue, there could still be delays.

Dr Gina, in his response, shared estimates in three phases of the project with the first one being the hotel.
According to the minister, about E1 billion has already been used in the construction of the hotel while E1.87 billion still needed to be injected.
He stated that the figure for the cost to finish was estimated at roughly E1.15 billion.

For the ICC, the minister said around E1.3 billion had already been spent while about E340 million was needed for its roofing which he referred to as ‘luphahla’.
As if that was not enough, roughly E314 million is still needed for the interior of the ICC and the minister did not hide that the figure could still go up.

The other phase which the minister said also had its own estimates is the earthworks, piping and diversion of the river which he said needed roughly E1 billion.
Even though he did not state the exact figures of how much was still needed, the estimates reflect that roughly E2 billion still needs to be injected into the project.

Expected

Elaborating, the minister explained to the House that while it was expected that the project would be completed by December 2020, there might still be delays if financial challenges persisted.

He mentioned that the interior of the structure was complicated and that it needed to be properly done.
On another note, the minister informed the House that government was still searching for an operator who would run the hotel.
“The hotel needs an operator. We are still assessing proposals from operators in South Africa and the United States of America. This also affects the process and completion of the project,” he said.

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