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OUR SINKING FIVE-STAR PROBLEM

21/09/2022 08:47:00 Sanele Sibiya

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Allow me to address the issue of our sinking multi-billion infrastructure problem.

I reference my train of thought on an article published in the Bridge on September 18, 2022. I am going to focus my attention on the massive cost over-runs associated with the project, and this is an old problem. Yes, sinking structures may be a new problem, but the issue of cost over-runs is a common problem and it requires urgent and expedient actions from the relevant ministries.

Initial cost estimates

In 2017, when the project was commissioned, it was estimated it would cost the taxpayers E1.1 billion, with an estimated construction timeframe of two years and an estimated completion date of 2020. Five years on, works on the site are still ongoing and the price tag keeps ballooning and to date it has cost the taxpayers approximately E7 billion. Furthermore, there is no official handover date; this could only mean that the costs to the taxpayer are going to continue growing. This seems, to me, a gross injustice to the taxpayer and it seems no one is held accountable and no one will ever be held accountable. This is taxpayers’ money and the government of the day owes accountability to the taxpayers. Government has normalised cost over-runs as I am yet to hear about a project that has been completed within the allotted timeframe within the portfolio of projects that government undertakes. We faced the same issues with the Mbabane-Manzini Highway and all of our landmark projects as a country. I worry why we let this happen and if we are not worried about the costs to the taxpayer due to this laxity within the relevant departments.

The contracts

I am particularly worried about how we design our contracts as a country or we just sign willy-nilly without doing our proper due diligence on them. Or is it an issue of our inability to negotiate contracts; such that we end up with draconian contracts? Or is it an issue of the people we trust with the public purse not doing their job of protecting it from squander and mismanagement. The basic knowledge of contract theory, which I have, pre-supposes that a contract should be enforceable both ways. The contract should compel the government to ensure that they pay obligations due on all projects on time and adequate punitive measures should be put in place should the government not meet its obligations.

The very same contract should also compel the contractors to finish the project on time and hand it over to the authorities on time. If the contractors fail to hand over the project to the government on time, they should pay taxpayers for the delay. Furthermore, the contract should take care to allow for reasonable cost increases due to extenuating factors, not because we are taking long to finish the project and inflation is kicking in. Lastly I believe the contract should clearly detail the scope of work with very little room for alterations so we do not end up with a changed scope. I ponder on whether the contracts are worth even the paper they are written on if a fivefold escalation in costs is a normal occurrence in Eswatini.

How are payments made?

How are these payment claims even made? I do believe, for the paper trail in financial transactions, every claim should be accompanied by the contract and it should be within the contract. In my head I am thinking that there are probably contract re-negotiations and scope alterations. Is this done within the purview of public procurement? Are the legislators elected by the people still involved in this process or it’s just a few people within the public service who make these alterations. I am letting my train of thought run amok because I am trying to bring to mind the loopholes that may allow for corruption and the lack of accountability.

Impacts of cost over-runs

Cost over-runs are not good for the economy, and the infinite project completion horizon is also not good for the economy. The theory of project appraisal and management posits that excessive cost over-runs are usually linked to corruption. It is for this reason that I call for the Government of the Kingdom of Eswatini to do better to protect the public purse, we cannot normalise these excessive cost over-runs. Furthermore, the ballooning costs divert investments to other sectors and to other emerging needs of our people. Hence normalising these excessive over-runs is tantamount to us stealing from ourselves and the development potential of our country.

Accountability

We need a radical shakedown of the public procurement system and the whole tendering process. We cannot allow this anomaly to persist. We need to be thrift with each and every Lilangeni that we expand. We need to build efficiencies within the tendering process so that we reap the benefits of infrastructure investments. Ultimately the country should benefit from all these investments and not be drained in the process.