PPDA approves K315bn revised road contracts
Minister of Transport and Public Works Jacob Hara has told Parliament that the Public Procurement and Disposal of Assets Authority (PPDA) has approved K315 billion devaluation-induced price adjustments for stalled road projects.
Responding to concerns from members of Parliament (MPs) on stalled road projects yesterday, the minister said the PPDA nod should see contractors resuming work, once Treasury gives a go ahead.
MPs from both government and opposition benches took turns to express worry that road projects had stalled in their constituencies.
Hara said almost all projects stalled due to the 44 percent realignment of the kwacha last November despite that some of the projects were fixed contracts.
He said: “It is true that we had serious issues of price adjustments. Almost all the contracts had stalled because contractors had downed their tools.
“It became necessary for us to adjust the prices, unfortunately most contracts were fixed contracts… I’m glad to report that we have resolved that matter and all the escalations have been approved by PPDA.”
Hara said the country should expect contractors that had abandoned the projects to resume work as PPDA has approved to have value of the contracts increased.
In an interview, PPDA director general Eddington Chilapondwa confirmed having approved projects worth K315 billion and that more were being reviewed.
“There are also some submissions that we are working to clear,” he said.
But Chilapondwa said the Roads Authority (RA) was better placed to state how many contracts were involved and the initial value.
RA spokesperson Portia Kajanga could not be reached for comment.
Parliamentary Committee on Transport and Public Works chairperson Enock Phale, speaking in an interview, said it was a relief to hear that PPDA has approved the price adjustments.
Budget and Finance Committee chairperson Gladys Ganda also expressed hope that the money to cover price adjustments has been included in the budget.
Reserve Bank of Malawi devalued the kwacha by 44 percent in November 2023 and by 25 percent in May 2022.
As of July 2023 projects worth K439.8 billion were off track. Some had recorded low progress after lapse of contract period. The projects faced challenges of forex shortage, devaluation, weather effects and several others.
