Rising costs affect 175 road projects

Escalating in costs have affected 175 road projects across the country, pushing the roads budget to K827 billion from K512 billion, the Roads Authority (RA) has confirmed.

RA board chairperson Matilda Matabwa on Saturday confirmed the cost adjustments for the 175 projects and that the Public Procurement and Disposal of Assets Authority (PPDA) has given a no-objection on the adjustments.

“There is none remaining. All have been cleared by Public Procurement and Disposal of Assets Authority,” she said.

Following the 44 percent kwacha devaluation last November, road projects funded by the government stalled as contractors requested to have their contract sums revised.

Matabwa said in the wake of PPDA’s approval of cost adjustments, works have resumed on projects.

She said contractors’ requests for time extension for projects will be evaluated.

“Time extensions are determined through negotiation, taking into account the remaining or yet-to-be-covered tasks,” said Matabwa.

In a separate interview, Ministry of Transport and Public Works spokesperson Watson Maingo said government has made progress in addressing the issue of stalled projects.

He said: “Everything is in order. We are geared to deliver on the projects. When projects delay, the contractor is also affected because the longer they take, the more they will have to pay the workforce.”

Malawi Building and Civil Engineering Contractors and Allied Trade Association (Mabcata) Wickly Mhango said contractors will work to deliver on time.

However, he said there is need to be pegging contracts in dollars so that projects do not get affected whenever there is movement of the kwacha.

Mhango said so far, RA has come up with a clause on fixed contracts which says when there is a movement of less than 14 percent, project costs will not be adjusted and contractors have to prepare for that when bidding.

He said while the 14 percent ceiling is a step in the right direction, contractors would want either a five percent or to have the contracts pegged to the dollar.

Ministry of Finance and Economic Affairs is on record as having said that there is need for Mabcata to formally write Treasury on the issue of pegging contracts to dollar.