By Cathy Maulidi:
Minister of Transport and Public Works Jacob Hara has disclosed that the Public Procurement and Disposal of Assets Authority (PPDA) has approved price adjustments for some road projects in the country.
These are roads whose contract prices firms working on them adjusted upwards following the 44 percent devaluation of the Kwacha in November last year.
Hara told Parliament yesterday that the price adjustments as approved by PPDA put the total amount for some locally funded projects at K315 billion.
In the current financial year, the development budget has an allocation funded road projects. of K295 billion for 198 government-
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However, Hara said due to the devaluation of the Kwacha, contractors were expressing concern that prices of materials also went up and that they could not deliver on the projects.
“The contractors suspended the works. We were not able to make the contract price adjournments that they were requesting because their contracts did not have price adjustment clauses, since they were fixed contracts and contractors were supposed to implement them on a fixed term.
“So, we felt that we really needed to reconsider the contracts considering the situation now and we felt it did not require any argument considering the current prices of materials,” the minister said.
He added that Malawians should be prepared to pay for the good roads because without the contract price adjustments, the works would be substandard.
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PPDA Director-General Edington Chilapondwa said the agency received the request from the Roads Authority (RA) to approve some contract price adjustments.
“We have approved almost all the requests. We are just remaining with few roads projects which we are still analysing,” Chilapondwa said.
The Kenyatta six-lane road expansion project in Lilongwe is among those which stalled after its contractor asked for a price adjustment.
Earlier this year, some roads contractors lamented the rise in prices of construction materials triggered by the devaluation.
RA engaged the contractors who had abandoned the projects in a roundtable to map the way forward on the matter.
Speaking on behalf of his fellow contractors during the meeting, Engineer Rocky Kaunda complained that they had not been given a good environment to work in.
“The environment is harsh economically in a sense that we recently experienced some price changes following the devaluation.
“Some of the contracts which we are discussing now were tendered as early as 2021; so it will be very difficult for one to work on prices that were agreed upon in 2021,” Kaunda said.
He warned that without government agreeing to the price adjustments, the conclusion would be to terminate the contracts.
