26 July 2017

Tanzania: JPM Orders Price Cut On Road Building Deal

Photo: State House
President John Magufuli speaks to PowerChina International Group Limited representatives during the inauguration of the Itigi-Manyoni-Chaya road.

President John Magufuli has ordered the Tanzania National Roads Agency (Tanroads) to enter into renegotiations with the contractor who won the job of constructing the 57-kilometre Mkiwa-Itigi-Makongoros road sighting overpricing.

Addressing a rally at Itigi Town yesterday, President Magufuli, expressing dismay, said the price for construction of the road had been hiked.

According to President Magufuli, allocating Sh104 billion for the project was incurring too much.

"Whether Tanroads regional manager was involved in the negotiations or not the quotation has to be renegotiated. Tanroads chief cxecutive officer (CEO) is here, Sh104 billion should be used to construct a road that is longer than this of 57 kilometres.

"This price shows that a kilometre will cost over Sh1.5 billion," he said.

Although the Head of State didn't reveal how much was required for construction of a kilometre of a paved road, but data shows that the cost ranges between Sh700 million and Sh1 billion.

Dr Magufuli who served as Works minister before he was elected President warned Tanroads to exercise financial discipline in road projects, and ensure that quotations reflected fair prices and there was value for money.

The President said when he was a minister he sacked the agency's CEO over unrealistic quotations.

"Therefore, I won't wait for the minister to act, I will take action immediately. This is one of the ministries I'm watching closely. As for you, CEO, you are doing a good job, but avoid being used by contractors to create huge variances because businesspeople always look for profits," he warned.

Meanwhile, he hailed Tanroads for emerging one of the best performers after they came third in rank behind South Africa and Botswana in spite of serving 35,000 kilometres of road being the longest network as compared to other countries.

"In order to improve Tanroads performance, the government has decided to form another agency that will specifically oversee rural roads in the country's efforts to transform road network, which the fifth phase government believes can be done," he said.

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