MBABANE – The termination of the multimillion Emalangeni contract for the construction of the Gege/Sicunusa road may cost government an arm and a leg.
The construction of the road, which was to cost E466 million, is currently stalled due to a number of complicated reasons, one of them being disagreements between government and the contractor.
A First Quarter Performance Report of the Ministry of Public Works and Transport explained this week that there had been no progress in the construction due to the capacity of the contractor to take the work to completion.
The principal contractor for the road was Kukhanya Construction, which went into a joint venture with Gabriel Couto. Midway through the construction process, the road was stalled after funding dried up.
Couto also pulled out, leaving Kukhanya incapacitated to complete the task. Consulting engineers are ZMCK and the project was jointly sponsored by the Government of Eswatini as well as the Arab Bank for Economic Development in Africa (BADEA). The road covers a stretch of 50 kilometres.
Last month, the Public Accounts Committee (PAC), a parliamentary watchdog on government spending issued an instruction that the Ministry of Public Works and Transport must cancel the contract and further report back on the cost implications involved. This was after the PAC had toured the construction site.
An experienced engineer who was asked to give expert opinion on the issue said the cancellation of the contract may not be straight forward as presumed by the parliamentarians.
“There is a process that must be followed, which is a bit complex and may be costly to the party that assumes the initiative to cancel the contract. The first thing to do for all parties is to return to the provisions of the contract that was signed when the contractor was appointed.”
The contractor alleged that the contract stipulates that in the event of a dispute, the two parties must bring in a third party to be a mediator in the case.
If the mediator also advises that the only way to go is the cancellation, then both parties must lodge claims.
The engineer alleged that the contractor could lodge claims based on the work already done and what was owing at the time of work stoppage. The government can also speak about the damages resulting from the exposed layers and lack of asphalt as there is erosion in some parts of the work that was done.
He said currently, the contractor holds lien (ownership) of the site, which implies that there are costs attached to such arrangement.
“However, the contractor would have to prove any losses incurred, as such is the standard procedure in claims.
“For instance, if the contractor says by staying in the site it was losing E5 million per month, this has to be qualified.
“For example, if the contractor says it was paying staff for the past year in which work was halting, such must also be calculated,” he said.
He said government may refute liability for wear and tear of equipment that has been stalled on the site since 2017, when work stopped.
“It’s possible that a contractor can claim for such but also, take into consideration that government could say it is not to blame for such because it was not holding the equipment on the site. Any contractor has a duty to mitigate the costs.”
The engineer also said the contractor may also be entitled to claim for loss of earnings, as long as it could prove such losses.
The Information Officer for the Ministry of Public Works and Transport, Mayibongwe Dlamini said the ministry was still consulting widely on the issue.
“As per the recommendations of the PAC on the same project, the ministry is still working on those recommendations and consultations between the stakeholders are still ongoing and unfortunately cannot yet be shared with the media as of yet,” he said.
A manager of Kukhanya who spoke on condition of anonymity said: “I don’t think you can get a comment from the company because a contractor does not speak to the media while the contract is still on. Only government can comment.”