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NHLANGANO-SICUNUSA ROAD: E144.92M MORE REQUIRED

28/02/2021 00:19:00 BY MFANUKHONA NKAMBULE

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MBABANE – Government has estimated that it might end up spending an additional E144.92 million more on the failed Nhlangano-Sicunusa road project.

Even though nothing is currently taking place on site as the contractors abandoned work before it was completed, government says the estimated cost for this failed project is set to reach E793.62 million by March 31, 2021. This is against the actual expenditure incurred by government as at March 31, 2020, which stands at E532.70 million. To kickstart the aborted project, government has set aside E116 million.

Adding the new amount of E116 million, which will be ready for use in the next financial year beginning April 1, 2021, to the actual expenditure of E532.70 million does not add up to E793.62 million. The sum of E793.62 million is an estimated cost for the project by March 31, 2021.

The amount of E116 million actually increases the expenditure to E648.70 million – not E793.62 million. It therefore, means that there is a shortfall of E144.92 million. In the current financial year, government had only indicated that it owed Gabriel Couto/Kukhanya Joint Venture a sum of E80 million.

It is not clear if part of the E144.92 million was paid to these contractors or this is money set aside for the clearance of the old account.

Inyatsi Construction has been engaged to start the project afresh. It is stated in the budget estimates that the sum of E116 million should be released from the Consolidated Fund to facilitate road design reviews, supervision and construction. In fact, it is mentioned as money to be used for the commencement or resuscitation of the project.

The current status of the project will be discussed in Parliament when Auditor General Sipho Matsebula and the Public Accounts Committee (PAC) meet with controlling officers to give clarity on public expenditures.

It is reflected in government financials for the financial year 2013/2014 that the initial total cost of the project stood at E298.22 million.

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

In fact, government financial records indicate that E8.5 million had already been spent on road designs and resettlement project by March 31, 2012. The initial planned duration of completion was two years. However, the project is still incomplete eight years later.

According to the Post-COVID-19 Economic Recovery Plan, government budgeted an additional E500 million for the continuation of the construction of the Sicunusa-Nhlangano road. The Sicunusa–Nhlangano road is part of the main network of Eswatini, which provide an important connection between agricultural areas and urban centres.

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

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 Mkondvo 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.

Govt’s justification

Justifying the continuation of the project, government said the completion of the Nhlangano-Gege-Sicunusa road would facilitate growth in the tourism industry. Government understands that this project is significant because they will improve the standard of living in the country.

In his previous audit report, Matsebula, the AG, 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.

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, 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 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).

loan agreement breach

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.

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 has to be said 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, which has now being given to Inyatsi Construction.