Rail project to cost k28bn more

Ministry of Transport and Public Works projections show that the cost of the Marka-Bangula railway line could rise by K28 billion from the current K68.2 billion to K96.2 billion due to new scope of works.

The ministry’s Principal Secretary for Administration Madalo Nyambose, in a confidential memo to Minister of Transport and Public Works Jacob Hara dated September 3 2023 The Nation has seen, said the changes relate to a directive the minister issued in July this year.

In an interview last evening, the minister confirmed about the July 31 meeting, but said the projected jump in the cost was on the higher side and that he will act on the memo once he gets hold of it.

Said Hara: “A determination on the scope of works has not been made. But it is very unlikely that the price could jump to that level, very unlikely because what would be the justification for the price to move to that much?

“According to the PPDA [Public Procurement and Disposal of Assets Authority], all I am aware of is that if there are any changes, they can only be  up to 15 percent, that’s the only thing that we can effect. Otherwise then we are restarting the whole process, it has to go back to PPDA.”

Nyambose, in the memo, said the client, the supervising engineer and the contractor agreed on the final project scope, detailed engineering designs and cost for the railway project following the minister’s directive during a July 31 2023 meeting.

Reads the memo in part: “The final project cost, including contingency, VAT and PPDA levy is now K96 243 469 612.50. This final cost represents an additional cost of K27 765 521 923.25 which is a forty percent [40%] increase in cost to the existing contract price of K68 279 419 378.91; hence, requires the approval of the Public Procurement and Disposal of Assets Authority.”

Nyambose said the changes in the cost also resulted from soil investigation surveys for the existing railway alignment and also considered the effects of cyclones Ana, Gombe and Freddy which have influenced major changes in designs for earthworks and pavement layers, bridges and other drainage structures.

Should the new cost be effected, it means the cost of the project will increase from K48 billion when the project was first offered to Portuguese construction and multi-disciplinary conglomerate Mota-Engil in 2021 to K68 billion quoted by China 20, the contractor on site.

In 2020, President Lazarus Chakwera and his Mozambican counterpart Felipe Nyusi agreed to revive the railway line between the two countries which is Malawi’s shortest route to the port of Beira.

The two countries signed a memorandum of understanding in May 2021 to have the project completed by March 2022.

While Mozambique has almost completed its stretch from Mutarara to Marka, Malawi is far from completing its 72-kilometre stretch from Marka to Bangula, over a year after the set deadline expired due to procurement wrangles.

Initially, Mota-Engil Malawi emerged as the lowest successful bidder for the project at a cost of K48 billion in 2021, but the Anti-Corruption Bureau nullified the tender citing procurement irregularities.

Ministry of Transport and Public Works retendered the project and China 20 was last year hired for the project at the cost of about K68 billion.