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NHLANGANO-SICUNUSA ROAD: E298M PROJECT RISES TO E1BN

06/09/2020 13:50:00 BY MFANUKHONA NKAMBULE

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MBABANE – An audit report on the upgrade of the Nhlangano-Sicunusa road indicates that the project cost at its inception stood at E465.99 million (E465 990.202.95.)

The Times SUNDAY can reveal that this could not be accurate as government in its records for the 2013/2014 financial year fixed the project at E298.22 million (E298 220 000). It was in the 2015/2016 financial year, when the project escalated to E465 million and E33.72 million had been utilised by March 31, 2014.

According to the Post-COVID-19 Economic Recovery Plan, government has budgeted an additional E500 million for the incomplete project, described by Auditor General Sipho Matsebula as a disaster. This project is now one of the most expensive government public works as it will cost the taxpayer a sum of E1.032 billion. That increases the project cost by 346 per cent.

EmaSwati had all along been blaming government for escalated costs for the construction of the Mbabane bypass road. The overall cost for this road inclusive of civil works and consulting services, increased from E440.69 million to E1.1 billion. Additional costs translated to 149.6 per cent.

Another project that started with a low budget is the construction of the King Mswati III International Airport at Sikhuphe. The initial budget in 2003 was E1.1 billion (US$150 million). Government has spent E4.18 billion by March 31, 2019. The original estimated budget for the construction of the International Convention Centre and Five Star Hotel (ICC&FISH) was E930 million in the financial year 2014/2015. The current estimated cost for the construction of ICC&FISH is E5.99 billion.

Meanwhile, the 43.5 km-long Sicunusa–Nhlangano road in the southwest is part of the main network of Eswatini, which provides an important connection between agricultural areas and urban centres. Works that were to be carried out under the project included:

Upgrading the gravel Sicunusa–Nhlangano road with a bitumen surface, designed to accommodate speeds of 100 km/hour;

Installation of culverts; and

Construction of bridges over the Mkhondvo and Ndlotane Rivers.

It had been planned that both rural and urban populations were to benefit from enhanced local, intra-regional and international exchange of goods, as well as from improved access to social amenities. Additionally, owing to the scenic nature of the region, tourism was expected to rise, thus increasing employment and business opportunities.

The project, as it were, depicts a grazing land, according to the AG’s report. In fact, government financial records indicate that E8.5 million had already been spent on road design and resettlement project by March 31, 2012.

Regardless of the fact that the project had reached E465 million, a sum of E532.70 million had been utilised by March 31, 2019. The exact figure is E532 701 000. In fact, the total expenditure for the project was estimated at E765.66 million (E765 666 000) by March 31, 2020. Despite the fact that E532.70 million had been utilised on this incomplete project, government wanted to pay the final account of the contractor, Kukhanya/Gabriel Couto Joint Venture a sum of E80 million.

In the meantime, the Post-COVID-19 Economic Recovery Plan shows that government was finalising existing contractual obligations, designing feasibility funding, undertaking design reviews and agreeing financial term sheet based on proposal. It is stated that Parliament would have to approve a loan for the upgrade of the road. This would enable government, specifically the Ministry of Finance, to sign financier agreement and contract.

Justifying the continuation of the project, government said the completion of the Nhlangano-Gege-Sicunusa road would facilitate growth in the tourism industry. It was listed together with the Bulandzeni-Pigg’s Peak-Bulembu road where a sum of E28 million had already been spent yet the road is still gravel. Government understands that these projects are significant because they will improve the standard of living in the country.

According to the audit report on the construction of the Nhlangano-Sicunusa road (MR13), Matsebula, the AG, raised concerns that the initial planned duration of completion was two years.

However, the project was incomplete five years later. He also raised serious concerns that the contractor, Kukhanya / Gabriel Couto Joint Venture suspended works, with the project resembling a drought stricken grazing area. He said the project would be of compromised quality if ever it was to be completed by the current contractor.

Ministry flouted rules

Of major concern to Matsebula was that the Ministry of Public Works and Transport had been flouting and contravening loan requirements, rules, criterion, contractual obligations and construction standards from the first day of the project. There were irregularities during pre-qualification of suppliers for construction works as the main contractor in the project, Kukhanya/Gabriel Couto Joint Venture (JV) was recommended for tendering stage despite not meeting prequalification requirements, according to the AG. It must be said that Kukhanya/Gabriel Couto JV was among the disqualified contractors highlighted in a Prequalification Evaluation Report (PER). The PER, which contained recommended contractors for the tendering stage and those that were disqualified from the prequalification stage because they did not meet minimum criterion, was submitted to the Ministry of Public Works and Transport.

It was mentioned that the Ministry of Public Works and Transport (Employer) issued a directive to the consultant to redo the prequalification process, a revised report, which was done and submitted to it in December 2012.

Kukhanya/Gabriel Couto JV made it into the list of recommended contractors for the tendering stage after a second prequalification process was carried out by the project consultant.

Another cause for concern was that the main contractor in the project, Kukhanya/Gabriel Couto Joint Venture was awarded a contract without approval by funding agencies, the AG stated.

The funding agencies were the Arab Bank for Economic Development in Africa (BADEA) and Opec Fund for International Development (OFID).

This was a breach of the loan agreement, which had specified that the borrower should submit for BADEA’s prior approval proposed contracts and orders for items to be procured out of the proceeds of the loan.

It must be said that Gabriel Couto demobilised from site and suspended their works. This was done in spite of the fact that a Joint Venture Agreement between Gabriel Couto and Kukhanya Civil Engineering had been legitimised by both parties on August 9, 2013 for the sole purpose of tendering for the Nhlangano-Sicunusa road construction works.

The Portuguese civil construction and public works company pulled out of the project despite the fact that it was a lead partner in the project. It held a majority shareholding of 70 per cent in the JV while Kukhanya Civil Engineering settled for the balance.

Funders expressed intention to withdraw the financial support after they discovered the concerns the AG raised on the contractor selection by government. “I am concerned about the failed joint venture because it impacts on the capacity of the remaining partner in the joint venture,”said the AG.

It must be mentioned that the shareholding in the JV referred to plant and machinery, technical and financial capacity each partner brought to the project. Therefore, it meant that only 30 per cent capacity was available to complete the project.

Emmanuel Ndlangamandla, the Executive Director of the Coordinating Assembly of Non-Governmental Organisations (CANGO), called for a forensic investigation into the incomplete project. Ndlangamandla decried alleged plundering of public funds, pointing out that people stealing from the public purse were being left unpunished. He said it was a concern that government unleashed police on dagga growers who never stole anything from the Consolidated Fund, but those who helped themselves to public funds were not brought to book.

He said Parliament made it clear that the expensive attempt to build MR13 should be forensically investigated. The executive director mentioned that the country had financial challenges, which should not be worsened by free hands to the purse.

He emphasised that the continuation of the project should precede swift apprehension of suspects. Ndlangamandla said failure by government to institute a forensic inquiry into the matter would create an impression that the country condoned financial misconduct.

Again, he insisted that it would also create impression that there were ‘holy cows’ – untouchable people who plundered public coffers as they pleased. “The Sicunusa-Nhlangano road project is one of those works, which raises eyebrows,” he said.

He urged Parliament to ensure the issue did not shift to oblivion.

Khangeziwe Mabuza, the Principal Secretary in the Ministry of Public Works and Transport, could only say at this point in time that government intended to restart the project as soon as possible. She said its recommencement was, however, dependent on availability of funds. The principal secretary emphasised on the need to adhere to procurement processes. In case the project is not undertaken in the current financial year ending March 31, 2021, she said her ministry would request for its inclusion in the next budget.

Deputy Speaker Phila Buthelezi, who is also the Chairman of the Public Accounts Committee (PAC) and Matsanjeni North MP, said they recommended for the continuation of the project because it would not interfere with the forensic investigation.

He said the PAC felt government should get a contractor to undertake the project as a matter of urgency. Buthelezi mentioned that they did not want a situation where rains would cause more damage on the earth works. The deputy speaker and PAC chairman disclosed that they also recommended for the engagement of a forensic investigation. He said the forensic audit or inquiry would consider paperwork to form its impression about the project. He said they recommended that the forensic report be tabled in Parliament.