28 June 2010

Tanzania: Govt Loses Sh36 Billion in Delayed Works

Delays in completing road projects have raised costs by Sh36 billion above the original estimates, an audit report shows.

"This money could be saved if road works were managed more efficiently and could be used to further invest in the road network," says the value for money performance audit report on road works by the National Audit Office of Tanzania (NAOT).

Seen by The Citizen ahead of the tabling of budget proposals for the ministry of Infrastructure Development in the National Assembly in Dodoma tomorrow, the document says out of 10 road works that were audited by NAOT, none was completed on time, resulting in a combined final cost of 57 per cent higher than the original budget.

In most cases the extension was for more than six months, revealed the report, indicating that the total original budget for10 road projects was Sh153.7 billion, but delays in construction pushed the cost to a whopping Sh241.3billion.

"Only three of the 10 roads audited were finished between one and five months after the initially agreed completion time," said the report, adding that the other seven took between eight months and two and a half years, beyond the initial work programme, to be completed.

"Such delays mean that the economic and social benefits from roads are also delayed," notes the report, pointing an accusing finger at the ministry of Infrastructure Development and the Tanzania National Roads Agency (Tanroads) for their laxity in overseeing the works.

For example, the report shows the project for the Kyabakari-Butiama road was planned to be completed in 16 months but it took 17 months. The Somanga-Matandu road which was to be completed in 30 months, took 32 months.

The Shelui-Nzega road which was supposed to be completed in 31 months saw the contractor extend the work to 36 months.

The Morogoro-Dodoma road took 32 months instead of 24 months.

According to the report, the Muhutwe-Kigoma road was to be completed in 12 months but it took 32 months. Whereas the Nzega-Tinde-Isaka road which was scheduled to be completed within 30 months took a year further.

Other roads that fell behind schedule included the Mutukula-Muhutwe road works, Songwe-Tunduma road works, Tinde-Shinyanga/Mwanza road works and various roads in Mwanza Region.

The report showed the design of any construction work included quantities required and the permissible costs which are mutually agreed between the ministry of Infrastructure Development, Tanroads and the contractors before the works start.

The audit observed that the management system for road works under the ministry of Infrastructure Development and Tanroads does not do well in ensuring economy, efficiency and effectiveness of the road works.

"This leads to poor quality, delays, cost overruns and, above all, reduced value for money by tax payers' resources," says the report.

It notes that quality control was not effective at the construction stage either, adding that inspections and monitoring were rarely conducted as planned and that documentation was inadequate.

It also shows that most delays in completing road works could be avoided, as they were within the control of the responsible ministry and Tanroads, and did not arise from uncontrollable circumstances such as earth quakes, wars and rains.

The audit also revealed that even after extensions were given, deadlines were not respected and contractors were left to determine their own work schedules.

"Neither Tanroads nor its consultants verify whether contractors' requests for extensions and cost overruns are justified before they are granted," it notes.

"Instead all requests (for extension) received blanket approvals. Still some contractors failed to complete the work within the granted time. Other works were completed before the extended deadline, suggesting they might not have needed the extension," said the audit.

It mentions the main reasons for delays and cost overruns as problems in planning, preparation and design, poor performance by contractors, and long delays before the start of construction, which made the original designs outdated.

Other reasons were changes in the scope of work (without redesigning) due to funding constraints, cost underestimations and inadequate coordination with local authorities and other government departments, in particular when works involved the relocation of existing utilities.

The audit revealed that in some instances funding constraints occurred because the ministry of Infrastructure Development and Tanroads had failed to secure financing before projects started.

It said that most of the road works were financed by donors and for funding to be released loan agreements and conditions for disbursement had to be met, adding that when this was not done properly, delays were likely to occur.

Uwazi, a non-governmental organisation that aims to improve access to information which enhances transparency and public accountability, says with nearly 13 per cent of the government budget spent on infrastructure each year, it is crucial that these issues are addressed.

It recommends that planning, design and preparation are carefully undertaken and that miscalculation of costs and inadequacies in design are avoided.

It calls for overseeing and quality control systems to be improved and for Tanroads to stop the practice of assigning consultants multiple tasks that could lead to conflict of interest.

In 2007/08, road works consumed Sh800 billion or an equivalent of 13 per cent of the government budget. In 2009/10 the government allocated Sh1.1 trillion for infrastructure development while in 2010/11 Sh1.5 trillion has been set aside to finance road construction activities.

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