By Deogratias Mmana:
The Kenyatta 6-lane road expansion project in Lilongwe continues to face hitches with the latest being a demand from the contractor for the government to adjust the pricing escalation formula because of the devaluation of the local currency, the kwacha.
Construction works have since scaled down with only few people on site.
The road is constructed by China Civil Engineering Corporation (CCECC) and work commenced on September 15, 2021 and was supposed to run for 18 months.
The project has missed the deadline.
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On Thursday this week, officials from the Roads Authority and from the China Civil Engineering Corporation visited the project site. But most areas of the project did not have people at work during their visit.
According to our source, if the government does not adjust the pricing escalation formula, the contractor will have to make a tough decision which includes possible abandonment of the project or get funds from China or from other projects it is responsible for to fund the 6-lane project.
“If the formula is not adjusted, the contractor will make a huge loss,” the source said and admitted that the works have now slowed down.
The sources said the contractor will in the meantime ignore the stretch from Kamuzu Central Hospital interchange roundabout to Shoprite.
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“Because of the formula, the contractor can lose almost half of the project money. If they do not change the formula, the contractor will be forced to make a decision. But the contractor may finish the project by October or November next year if the formula is changed,” the source said.
The source also said the procurement delay at the Office of the Public Procurement of Disposal of Assets Authority is also a challenge among contractors because at the time approvals are made, prices of some commodities are up.
The general manager for CCECC Joe Zhou refused to comment on the matter and referred us to the Roads Authority.
Chairperson for the Roads Authority Matilda Matabwa confirmed that officials from the body called for an abrupt visit to the site with the contractor and consultant after noting slow progress of the work.
Matabwa said the contractor reported that he has a cash flow challenge but did not mention about the demand to adjust the pricing escalation formula.
“About the cash flow challenge, it is him to address that because we pay him whenever he issues an invoice,” Matabwa said.
The road is funded through a local bond of K32 billion. Old Mutual and Standard Bank emerged successful bidders to finance the project.
Recently, engineers working on the project said they were not sure on when the project would be completed as the works continued to face numerous challenges.
Among other challenges, the project is also facing scarcity of forex which has affected importation of construction materials such as bitumen and steel and delayed relocation of services such as water pipes and electricity power lines.
Lilongwe Water Board recently said it needed K5.9 billion to relocate its pipes while Escom on the other hand said it needed K2.5 billion to relocate its power lines.
We did not get hold of the Minister for Transport and Public Works, Jacob Hara, for his comment but in an earlier interview about the challenges, Hara expressed hope that the project would soon be completed.
“So many things happened along the way. There was devaluation of the Kwacha and prices of goods have been going up at an exponential level way beyond the devaluation itself, so those are some of the things that we need to factor in,” Hara said.
President Chakwera launched the upgrading of the road together with the Mzimba Street in August 2021.
He described the project as a fulfilment of his promise to build a new Malawi through job creation, wealth creation and food security.
He said investment in infrastructure development is an accelerator to national development.
