Home | News | INYATSI WINS E500M SICUNUSA - NHLANGANO TENDER

INYATSI WINS E500M SICUNUSA - NHLANGANO TENDER

17/01/2021 00:18:00 BY MFANUKHONA NKAMBULE

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mfanukhona@times.co.sz

MBABANE –The continuation of the construction of the 43.5km long Sicunusa-Nhlangano Road is now certain.

This is due to the fact that Inyatsi Construction (Pty) Ltd, a high-profile local company, has been selected as the main contractor for the project which was abandoned by the joint venture of Kukhanya/Gabriel Couto a couple of years ago.

According to the Post COVID-19 Economic Recovery Plan presented by the late Prime Minister, Ambrose Mandvulo Dlamini, government budgeted an additional E500 million for the construction of Sicunusa-Nhlangano Road.

If the E500 million budget remains unchanged, it would reflect a variance of E399 666 000 as the Government of the Kingdom of eSwatini’s Estimates for the years from April 1, 2020 to March 31, 2023 states that the Sicunusa-Nhlangano Road project could cost E899 666 000.

It has been established that Inyatsi Construction, first registered in 1982, was awarded the tender after several companies had withdrawn their bids for a variety of reasons.

One of which was lack of capacity on their part to undertake the project of this magnitude during a time when local economy has terribly nosedived because of the impact of COVID-19 on inflation, sources said.

project

It must be mentioned that government had spent E532 701 000 on the incomplete project by March 31, 2019.

In the end, the road would cost over E1 billion when adding the current budget of E500 million to the money that had already been spent on the project.

The over E1 billion excludes a sum of E80 million that was set aside by government to pay final account of Kukhanya/Gabriel Couto Joint Venture.

This is despite the fact that Kukhanya/Gabriel Couto JV did not complete the project. When they left the project site, Gabriel Couto had broken ties with the local company.

Auditor General (AG) Timothy Sipho Matsebula described the incomplete project as a shame as it resembled a grazing land.

Pertaining to the continuation of the project, Vincent Buhle Dlamini, the Chief Roads Engineer in the Ministry of Public Works and Transport, said companies were invited to a tender that had specifications.

He said some companies felt that the tender requirements were way above their capacity to deliver; hence they withdrew their bids.

He said one requirement was that the bidding company should price or calculate the total cost of the project as if government were to release funds for its financing. Dlamini said the other specification was that calculations should be made as if the bidder would raise the funds for the construction of the road. The chief road engineer said the standard or point of reference against which the Sicunusa-Nhlangano Road may be compared were the Lukhula-Big Bend and Lonhlupheko-Siteki Roads respectively.

These projects are fully funded by the contractors, WBHO and A.G. Thomas to the tune of E545 million.

Meanwhile, the government’s chief roads engineer continued to say there was hope that Inyatsi Construction (Pty) Ltd, as a local company with a good track record for good service delivery, would successfully undertake the project.

He quashed insinuations that the local company was selected through a single-sourcing form of tendering. Dlamini mentioned that the bids were transparently received and opened by the tender Board.

“It was a bid opening that is in the public interest; hence I can tell you now that Inyatsi is the eventual winner. The bids were opened by the tender Board,” he said.

He said Inyatsi has been operating for a long time and had also mastered the art of delivering to the satisfaction the client.

“I have no doubt that they would do a wonderful job for us as a nation,” Dlamini said.

He said the financing model on whether to seek external funding or let the contractor raise funds on its own would be concluded at a later stage.

Construction

Afrotim Construction Director Isaac Magagula, congratulated Inyatsi Construction on winning the tender. He said he was always happy to see Eswatini companies undertaking huge projects. Magagula mentioned that Inyatsi Construction had the capacity to undertake any project.

“There is no doubt that the project would be a success because it will be done by a giant company. I’m always happy when Eswatini companies win tenders for big projects. I can only say ‘congratulations to Inyatsi’ and you deserve it,” Magagula said.

Inyatsi is currently constructing the Mbadlane-Manzini Highway.

The Sicunusa-Nhlangano Road entails three main project components – design review, supervision and construction. The estimates for this project reflect that the design review could cost E195.28 million while supervision might be priced at E151.402 million and construction could cost E552 984 000, bringing the project total to E899 666 000.

This publication can mention that Inyatsi Construction Group Holdings (Pty) Ltd (ICGH) is a multi-facet company that specialises in infrastructure projects, including roads and earth works, civil work, asphalt production, renewables, bridge construction, buildings, storm water drainage, water reticulation, water treatment plants, sewer works, dams and reservoirs as well as property development and management

It is the parent company for Inyatsi Construction and others.

On the other hand, Inyatsi Construction, first registered in 1982, remains the largest construction company in Eswatini. It is a company totally owned by emaSwati.

This effectively means it has been in the construction industry for more than 39 years.

inception

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

The Times SUNDAY can reveal that this is inaccurate as government in its records for the 2013/2014 financial year, fixed the total cost of the project at E298.22 million (E298 220 000).

It was in the 2015/2016 financial year, when the project escalated to E465.9 million. It must be said that E33.72 million had been utilised by March 31, 2014.

In fact, government financial records indicate that E8.5 million had already been spent on road design and resettlement project by March 31, 2012.

The initial planned duration of completion of the road was two years. However, the project is still incomplete 6-8 years later.

Due to the fact that the initial contractors did not complete the project, it might turn out to be one of the most expensive government public works. Other projects that exceeded initial budget limits include, but not limited to, the Mbabane-Bypass Road, Mbabane-Manzini Highway and King Mswati III International Airport.

However, the Sicunusa–Nhlangano Road is part of the main network of Eswatini, which provides an important connection between agricultural areas and urban centres.

The initial contractors were contracted to carry out some of the following;

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

l Installation of culverts; and

l Construction of bridges over the Mkondvo and Ndlotane Rivers.

It had been planned that both rural and urban populations were to benefit from enhanced local, intraregional 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.

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.

Government understands that these projects were significant because they would improve the standard of living in the country.

In an audit report, Auditor General (AG) Matsebula raised serious concerns that the contractor, Kukhanya / Gabriel Couto Joint Venture stopped construction works, with 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.

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 since the first day of the project.

irregularities

There were irregularities during pre-qualification of suppliers for construction works as the main contractor in the project, Gabriel Couto / Kukhanya Joint Venture was recommended for tendering stage despite not meeting prequalification requirements, according to the AG.

It must be said that Gabriel Couto/Kukhanya 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 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 in December 2012.

Gabriel Couto/Kukhanya 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, Gabriel Couto / Kukhanya 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 all proposed contracts and orders for items to be procured out of the proceeds of the loan.

Agreement

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 construction works.

The Portuguese civil construction 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. 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.