Showing posts with label Benzene International Pte Ltd. Show all posts
Showing posts with label Benzene International Pte Ltd. Show all posts

March 13, 2018

Politics of Road Buliding- The Portughese Way

Malawi: Presidency’s ‘sweetheart contractor’ Mota-Engil grabs the lion’s share of road contracts

It is widely seen as the Malawi presidency’s sweetheart contractor. And a leaked official report lends weight to this perception, showing that Portuguese-based multinational engineering firm Mota-Engil has almost 10 times the value of government road-building contracts as its nearest rival.

This story was supported by the Centre for Investigative Journalism Malawi, in association with the amaBhungane Centre for Investigative Journalism

A report by the Roads Authority (RA) shows that Portuguese-based multinational engineering firm Mota-Engil currently has road contracts in Malawi with a combined value of 142-billion Malawi kwacha (R2.4-billion).

By contrast, the second most-favoured company, Zhajoung of China, is engaged in government road projects worth just K14.9-million (R250-million).

A high-ranking executive from a rival civil engineering company, who asked to remain anonymous, said the feeling among competitors was that Mota-Engil was the principal beneficiary of Malawi government tenders.

“We cannot protest the conduct of government when it comes to awarding these projects to Mota-Engil because the construction industry in Malawi is guided by politics,” the executive said.

Asked for comment, Mota-Engil’s public relations officer, Thomas Chafunya, said any questions should be directed to the Malawi government and the RA.

“We are the bidding and contracted party, but they are the contracting authority and owners of the projects on behalf of Malawi,” he said.

The RA’s public relations manager, Portia Kajanga, insisted that the authority follows the Public Procurement Act.

Kajanga said all donor-funded projects must follow donor requirements and guidelines, meaning that “the RA follows transparent procurement systems – there is no bias in the award of contracts”.

Kanjanga also said the RA manages numerous projects under the government’s recurrent and development programmes.

“Under the development programme, the authority is managing 10 contracts, five of which are being executed by Mota-Engil and the rest managed by different contractors,” she said.

According to the Roads Authority report, Mota-Engil has been contracted to build the Thyolo-Makwasa-Thekerani-Makhanga road, funded to the tune of K27.3-million (R450-million) by the Malawi government, the Kuwait Fund, the Arab Bank for Economic Development in Africa, the Saudi Fund and Opec.

Construction on the 82km road began in August 2016 and is expected to be completed next year.

The company is also building:

the 95km Lilongwe Old Airport-Kasiya Spur road, costing over K39.6-billion (R670-million), with Malawi government funding. The project, which will take up to 95 months, commenced in January 2015.
The 75km Liwonde-Mangochi road worth K29.9-billion (R450-million), funded by the African Development Bank.
The government-funded 75km Njakwa-Livingstonia Project, which will cost K39-billion (R670-million).
The 4.4km highway from Parliament to the Bingu National Stadium, which will cost MK6.6-billion (R90-million). The funding is from the Malawi government, through the Road Fund.

Mota’s nearest rivals are Zhajoung of China, which the RA report said has work worth MK14.9-billion; China Railway Bridge 5 (MK9.8-million, or R166-million); and Malawian-owned Fargo (MK9.2-billion, or R150-million).

The generous treatment of Mota-Engil follows repeated controversies over its relationship with former president Bingu wa Mutharika, the older brother of Malawi’s current leader, Peter Mutharika.

The brothers were very close. Local media reported that Bingu left Peter K74-million in cash in his will, as well making him co-executor of his estate. He is a key figure in the Bineth Trust, Bingu’s property vehicle.

The Nation newspaper reported that Bingu died in April 2012 “at the height of whispers regarding his relationship with Mota”.

The company reportedly built a villa in Portugal for him called Villa Casablanca, as well the mausoleum of former first lady Ethel Mutharika at his Ndata farm in Thyolo, where he was also buried.

The Nation quoted the company as saying these projects were “donations towards a cause”.

Mota-Engil came under the spotlight in 2012, when The Nation newspaper reported that it had seen three cheques amounting to K13.5-million (about R420 000 at the time) which the company had deposited in Bingu’s personal bank account at the Capital City branch of Standard Bank in Lilongwe. It gave the account number as 0140001886701.

The newspaper reported that the cheques were drawn against Mota-Engil’s Engenhara Eco FMB current account and carried the signature of Mota’s managing director, Antonmarco Zorzi.

Zorzi was quoted as saying that the payments were for copies of The African Dream, Bingu’s book, which he had bought at auction at the book’s launch in February 2011.

The Nation countered that the cheques had been deposited a year earlier than the launch, in March 2010.

Mota’s perceived ties with Bingu were again highlighted in June 2016 by the veteran MP for Mzimba West, Harry Mkandawire, who told the Malawian parliament that Bingu had salted away K61-billion in assets offshore. In 2004, when he became president, Bingu declared K250-million in assets.

In a document tabled in parliament, Mkandawira alleged that the former president received 10% of all payments to Mota on government contracts, and that his offshore assets had been accumulated with the help of “inducements” by the company.

His deceased estate revealed that in addition to Ndata estate, the former president owned six farms in Malawi, four vacant lots and four houses in Blantyre, and vacant land and a house in Harare, Zimbabwe.

Mkandawire said that he had evidence that Bingu had stashed away assets in foreign countries including Australia, the United States, South Africa and Taiwan.

After his sudden death, it was alleged that cash including millions of US dollars was removed from State House. The Malawi Law Society called for a probe of his fortune.

However, President Pete Mutharika angrily challenged Parliament’s public accounts committee to investigate the alleged K61-billion.

He called the allegations “political tactics to torment my family”.

Based on anonymous sources, the Nyasa Times also alleged that Mota is bankrolling a campaign by Agriculture Minister Georg Chaponda to win the presidency next year.

Mutharika has allegedly anointed Chaponda as his successor. The Nyasa Times claimed that the minister refused to grant an interview.

Mota, which has been active in Malawi for more than 20 years, initially entered the country as a road contractor, but its portfolio of contracts has ballooned into new sectors.

In July 2013 the government handed it the management and operation of four ports on Lake Malawi through a concessionary agreement giving it the right to finance, manage and run the ports for a 35-year period.

The Nation reported last year that the contract was awarded without passing through a competitive tender process and violated the Public Procurement Act, as it had not been signed off by the director of public procurement.

The government justified the award by saying no other company was interested. Mota’s chief executive for Africa, Gilberto Rodrigues, was quoted as saying that the approach came from government, adding: “They had a problem and we could be the solution.”

In July 2013 the company built the Nsanje Inland Port, part of the $6-billion Shire-Zambezi waterway project that links Malawi to the Indian Ocean. The port was Bingu Mutharika’s brainchild.

President Mutharika’s press secretary, Mgeme Kalilani, said the responsibility for awarding government road tenders lies squarely with the Roads Authority.

“The presidency, let alone president… Mutharika as an individual has absolutely nothing to do with such processes,” Kalilani said.

“To allege that a company that has been doing business in the country for many years, even before the Mutharika brothers made their names on the local political scene… is a desperate attempt by haters to drag the name of the current president in the mud for malicious reasons.

“Mota-Engil is not winning tenders because it constructed the house of the president’s late brother some years ago.” DM


Saudi Rail Event

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 Speaking at the 12th edition of the Middle East Rail 2018, Khalid Al Sultan, vice president - infrastructure, Saudi Railway Company (SAR), covered the company’s railway development plans in context of the country’s Vision 2030. He explained that railway will play a major role in three aspects of development: a cost efficient means of moving goods & freight, a means of moving people as well as aligning with major ports and entry points to ensure seamless infrastructural connectivity.

He also explained in great detail the length and depth of coverage of the country’s three major railway lines including the Riyadh Dammam Line, North-South Project (connecting major heavy industry hubs for freight projects) and the 453-km long Haramain High Speed Railway (HHR) project linking the holy cities of Makkah and Madinah.

Al Sultan also expressed SAR’s keen interest in working with the private sector to collaborate and partner in achieving success in multiple new projects. Of note were Public-Private Partnership (PPP) opportunities for the 340-kilometer dDouble-track Yanbu to Jeddah connection (via King Abdullah Port) and the 40-kilometer double-track Riyadh to Riyadh connection and new Dry-Port (connecting SAR and SRO networks in Riyadh and New Dry Port to be situated outside of Riyadh).

He also mentioned that SAR will soon be floating tenders for the Riyadh-Dammam and the Land Bridge Project. The project consists of a 449-kilometer passenger Line connecting Dammam and Riyadh passing through Al Ahsa and Abqaiq, a 546-kilometer Freight Line connecting King Abdulaziz Port in Dammam with Riyadh passing through Al Ahsa, Abqaiq, Al Kharj, Haradh and Al Tawdhiyah and a 400-kilometer Sub Line connecting industrial, agricultural and military sites with export ports and residential areas.

The Land Bridge extends from Jeddah to Riyadh with a total length of approximately 1000 km of double-track. It also connects with the GCC Railway Network.

Alstom showcases its complete mobility solutions

Alstom is showcasing its complete mobility solutions for urban signaling and services. 

“Alstom has been a reliable partner for the Middle East region since decades,” said Mrs. Thi Mai Tran, managing director of Alstom Gulf. “Alstom’s dedication to the UAE and the Middle East market and to the development of its transport & mobility network which includes Tramways, metro, high speed as well as signaling is confirmed by the number of projects currently in the region. Alstom is looking forward to further re-enforce its commitment to the development of the Middle East mobility sector and economy through participation in the upcoming railway & mobility projects,” added Tran.

The provider of the Dubai Tram and the leader of the ExpoLink consortium for Route 2020 project of the Red Line extension of Dubai Metro have highlighted eight new technologies with the power to transform mobility in the Middle East now – or in the very near future.

Ranging from connected tech to help passengers plan easier, more comfortable journeys, to autonomous last-mile shuttles, next-generation electric buses, and behind-the-scenes management systems to keep the whole transport system running smoothly, each of the innovations is available now to be deployed. When put together, they offer a revolution in smarter, more sustainable mobility for both passengers and operators, and will help rapidly growing cities move and breathe more easily for a better tomorrow.

Among the solutions Alstom will present on its booth, are Alstom’s Urban Integrated solutions; Citadis Range: More than 2,500 Citadis tramway sold in 53 cities; Mastria, the orchestration of all public transport modes from rail to road; Ecodesign: Sustainability in mobility from manufacturing to recycling; Aptis: the premium passenger experience inspired from the tram.

Indian Railways to talk about expansion

Indian Railways, India's national railway system operated by the Ministry of Railways, will talk about $140 billion worth of current and future rail projects that the government is building to upgrade country’s urban transportation network.

Mahesh Kumar Gupta, member engineering - Indian Railway Board, will lead a high-profile delegation of railway officials and experts to share more details about the region’s largest railway network’s expansion plans and future growth prospects, besides outlining a buddle of opportunities that the industry offers in the segments of metro, tram, monorail, long-distance freight and passenger train, and high speed rail.

Gupta, said: “We will highlight some of our achievements, growth prospects and future projections during this two-day event. This kind of events helps in creating awareness about gigantic organizations like Indian Railways, which deals in mega projects such as high speed trains, dedicated freight corridors, electrification, capacity expansion and tech development.”

Indian Railways will also be represented by two of its overseas arms – RITES and IRCON International Limited. While RITES deals in consultancy of transport and infrastructure and export packages of rolling stock, the IRCON is mainly into construction of railway projects.

“These are exciting times for railway industry. There are serious challenges in the road and air transportation sector, hence, the upgradation of the railway infrastructure is the need of the hour. Indian Railways has realized that accumulated backlog investment is the root cause of its inability to improve the market share or quality of services,” said Gupta.

Indian railways aims to concentrate on major investment projects in the areas of dedicated freight corridor, high speed rail, modernization of signaling system, track and rolling stock maintenance with major emphasis on safety. “Our future plan is to focus on electrification, 100% use of LED lights, ETCS level II of signaling and high speed technologies.”

Source- Saudi Gazzette

February 21, 2018

Security Clearance Sought for Road Project

Coastal road project...

With five international consortia among the 17 bidders, which qualified for the 29.2km coastal road project in the city, including China and Italy, the Brihanmumbai Mumbai Corporation (BMC) has written to the Centre for security clearance.

The proposals of 17 bidders will be analysed by a consultant appointed by the civic body.

After the analysis, the financial bids will be opened and the contract will be given to the lowest bidder.

However, if the Union Home Ministry disqualifies any firm, their financial bids will not be opened and will be automatically rejected.

“We have written to the Centre informing about the international firms’ participation and their security clearances,” said Sanjay Mukherjee, additional municipal commissioner, projects.

Talking about the commencement of work, BMC chief Ajoy Mehta said, “The actual construction of the Coastal Road between Marine Drive to Kandivli will begin in May this year, once the tendering process is completed in the next two months.”

The Hajo Ali section of the road. (HT Photo)

“The first phase of Marine Drive to Bandra Worli Sea Link has to be constructed by the BMC, while the construction of the remaining part will be taken care of by MSRDC,” he added.

Meanwhile, the international firms participating in the bid are from China, Italy, Korea, Dutch and Gulf countries.

Amid Sikkim stand off last year, Union Home Ministry had denied security clearance to Chinese consortium China Railway Major Bridge Engineering Group Limited in joint venture (JV) with Gayatri Projects Limited for the construction of Mumbai Trans Harbour Link.

The BMC is currently awaiting reply from the home ministry for its coastal road project.

In the past, Chinese companies have been disqualified by the Union Cabinet Committee on security grounds because of the growing cross border tensions between the two countries.

Chinese companies were also denied security clearance for the construction of Bandra-Worli Sea Link (BWSL).

Ajoy Mehta had ordered the civic officials to finalise the request for proposal (RFP) tender by March 15, 2018.

The coastal road aims to provide connectivity between western suburb and the island city.

The civic body proposed that the work be divided into two parts.

The south phase of the bridge will run from Princess Street flyover till the south end of the Bandra-Worli sea link and the north phase will cover the stretch from the north-end of the sea link to Kandivli.

The coastal road will have eight lanes with two dedicated bus lanes.

The project will require 186 hectares of land to be reclaimed, of which 91 hectares will be developed as green spaces. Stay updated with all the Mumbai Latest News headlines here. For more exclusive & live news updates from all around India, stay connected with NYOOOZ.

February 8, 2018

2000 Road Projects in Stalemate

As many as 2,000 road projects awarded to contractors on multiyear contracts have hit a stalemate as no budget has been allocated for these projects in the current fiscal year.

The Department of Roads (DoR) had started around 2,000 road projects in different parts of the country on multiyear contract after taking permission from the Ministry of Finance. These road projects fall under different budget headings like Kathmandu Urban Roads, regional, tourism and city roads, among others.

After the country adopted federal set up, infrastructure projects like Kathmandu Urban Roads, regional, tourism and city roads, among others, have come under the jurisdiction of local bodies and provincial governments. But local bodies have not been able to provide budget for these projects as they have not yet received authorization to implement such works.

Contractors have warned that they would stop all construction work until they receive payment for completed works from the Ministry of Finance.

“It has been said the budget for these projects have been sent to local levels and provinces. However, we have not received any written information. This is why these projects have hit a stalemate,” Mukti Gautam, spokesperson for the DoR, said. 

These contracts are worth Rs 17 billion, and around Rs 7 billion of this has already been spent.

Contractors are pressing the DoR to release payments and compensate them for the loss caused by the delay in release of payment. The DoR accordingly forwarded a proposal to the Ministry of Finance for transfer of Rs 2.6 billion allocated for the projects but remained unspent in the last fiscal year. But the proposal is gathering dust at the finance ministry.

Officials of DoR said the that problem can be sorted out for the time being if the finance ministry transfers Rs 2.6 billion as requested and allocates another Rs 3 billion.

“We have been assuring the contractors that the finance ministry will release the budget soon. But frankly saying, we have not received any response from the ministry yet,” added Gautam.

In Fiscal Year 2015/16, the DoR awarded the tender for drainage and graveling work of Butawal-Belbas-Nuwakot-Palpa Tourist Road (10 km) to contracting firm Mahalaxmi-Divyajyoti at Rs 129.3 million. Similarly, the contract to blacktop the road worth Rs 92.7 million was awarded to Parkritik Construction Service. Mahalaxmi-Divyajyoti completed 58 percent of the works in FY 2016/17. But the contractor has slowed work this year as it has not got payment for the completed works.

“We are not even in a situation to pay our workers and buy petroleum products for our equipment,” Hari Rijal of Mahalaxmi Construction - a JV partner of Mahalaxmi-Divyajyoti - said.

The road project has to a pay total of Rs 60 million to the two contractors.

Construction entrepreneurs two weeks ago padlocked division road offices of Kathmandu and Charikot to press the government for early release of payments.

Bishnu Bhai Shrestha, president of Federation of Nepal Construction Entrepreneurs of Nepal, said that construction entrepreneurs are still to receive Rs 42 billion from government agencies for works completed across the country.

Though the construction entrepreneurs have raised the issue before both the Minister for Finance and the Minister for Physical Infrastructure and Transport as well as the foreign secretary, they have only received assurances.

According to the Public Procurement Regulation 2007, contractors should get payment for completed works within 30 days of submission of expenditure bill. If they did not receive their payment on time, they should get compensation as well, according to the regulation.   

Source- My Republica

October 5, 2017

Road Topping Tender

Brace yourself for more chaos on the roads

Biggest white topping project to date set to begin in second week of October

In tune with the State government's move towards white topping roads, the Bruhat Bengaluru Mahanagara Palike (BBMP) has approved tenders for white topping 29 roads and six major junctions totalling to a length of 93.47 km at a cost of ₹723.71 crore. For motorists, this will be mean smooth roads, but citizens remain sceptical given the deteriorating condition of roads every monsoon.
Work is expected to begin in the second week of October simultaneously on multiple roads, and add to the traffic chaos across the city.
“BBMP has set a one-year deadline for completion of works on the 29 roads. We have split the work and given tenders to two firms so that the project starts simultaneously and is finished on time,” said K.T. Nagaraj, Chief Engineer, Projects, BBMP.
All roads will be provided with service ducts on either side for optic fibre cables and power cables. However, sewage and water lines will not be shifted, sources said.
White-topping is an overlay of Portland cement concrete layer over the existing asphalt layer on the road. Chief Minister Siddaramaiah and City Development Minister K.J. George are passionate votaries of the technology. Recently, Mr. Siddaramaiah had said that he would like to see roads in the city to be white-topped.
For now, however, sections on major roads like Outer Ring Road, Mysuru Road, Brigade Road, Hosur Road, Bannerghatta Road, Sarjapur Road and Tumakuru Road will be revamped.
This will be the biggest white-topping project in the city to date.
Bengaluru City Traffic Police, who have given their go-ahead for the works, said that though the project will disrupt traffic in the short run, white topping of roads is better since it provides a pothole-free ride, once completed. “We cannot block the roads. Work will be taken up on one lane while traffic will be allowed on the opposite lane,” said R. Hitendra, Additional Commissioner of Police (Traffic). He added that they would like the BBMP to press more paver machines into action to speed up the process.

October 2, 2017

Nothing world class about TenderSURE roads

By Ashwini M Sripad  |  Express News Service  |   Published: 02nd October 2017 04:38 AM  |  
Last Updated: 02nd October 2017 07:21 AM  |   A+A-   |  
Cunningham Road, developed under the TenderSURE project, gets invariably flooded every time it rains; (below) potholes have also surfaced on some of these roads
BENGALURU: When conceptualised, TenderSURE roads were termed as world class. The recent heavy rains have, however, exposed their poor quality as well as the tall claims of the officials concerned. Sunday night’s rain left the TenderSURE roads waterlogged in the city yet again, with people wondering if the crores of rupees spent on them literally went down the drain!“It was difficult to commute on the water-logged Cunningham Road on Sunday night. Water was gushing on to the street through manholes and drains, and an unbearable stink made matters worse,” said Arun Jha, a resident of R T Nagar.
According to traffic expert Prof M N Sreehari, TenderSURE roads are world class only in terms of the money spent. The quality of the roads is as bad as normal asphalted roads. “On all TenderSURE roads, footpaths have been made wider without conducting any pedestrian user survey. The paver blocks on the footpath have been laid unscientifically. These are laid on the top layer of the footpath. The ground below them is not properly layered, which results in an uneven top layer and gaps in between the blocks. Whenever it rains, water percolates through them, leading to water stagnation and damaged road surface,’’ he said.
Many of the TenderSURE roads built in the first phase have sewer lines beneath them, including Richmond Road, Residency Road and Cunningham Road. “At times, if there are clogged drains, we end up digging the roads to clear the blockage,’’ said an official.
BBMP Commissioner Manjunath Prasad agreed. “Ideally for TenderSURE roads, all the utility should be shifted to one side of the road. But in the first phase, BWSSB did not shift sewer lines on some of the roads. This is one of the reasons for flooding,’’ he said. However, he was quick to add that the problem has been rectified in the works undertaken during subsequent phases.
Another reason for water clogging is the sweeping practices. “Pourakarmikas often push dust and waste towards gratings on the road surface that have been put to let rainwater into the drain. This results in clogging,’’ an official said.
However, K T Nagaraj, BBMP Chief (Projects), maintained there is no problem with TenderSURE roads and they are indeed world class. Flooding, Nagaraj claimed, is because of heavy rains. The gratings have small outlets for the rainwater to enter the drains. “If there is more water and smaller outlets, water will obviously flow slowly. On TenderSURE roads, water does not clog for more than three hours,’’ he added.  
Of the proposed 45 TenderSURE roads, nine are complete. Works on another three will be finished soon. Tenders will be called for 13 more roads under  phase II. The cost of these roads was around `7.5 crore per km, including shifting of utilities, wider footpath and bitumen-mixed black-topping. BBMP officials boast of 25 to 30 years durability of these roads.

September 13, 2017

Tender wars in Africa

SUMMARY The expressway will be one of the most important infrastructure project in the East African Community The Project has been structured to achieve early completion, under a fast-track delivery model, with concurrent design and construction Kenya’s Sh300 billion ‘thank you gift’ road project handed to an American firm on a silver platter has sparked a fresh tender war among implementing agencies.

As attention of country was focused on the August 8, General Election, a small team of government officials were holed in meetings to dot the i’s and cross the t’s on what is set to be the single largest road project in Kenya. The team, largely drawn from the Kenya National Highways Authority (KeNHA) and the Ministry of Transport, had already sent the project draft to the Attorney General’s office for comments and clearance.

Three days before Kenyans lined up to vote, the final signature was put on paper, handing over the lucrative contract to build the 473-kilometer high-speed expressway between Nairobi and Mombasa to a US firm, Bechtel International Inc. Unlike previous announcements of government projects of such scale, there was no press conference from the Ministry of Transport to break the news.

There was also no announcement from State House. Instead, government officials chose to make the announcement at lunch time on Saturday when everyone was training eyes on the political rallies, as the pessimists rushed to the shopping malls to stock pile food and other home supplies in case of  political stalemate. It also not clear why the announcement had to be done in such a hurry and on a day when most government offices were closed. Chinese company The press release sent to media houses at 1.30pm did not have the most important details of the project; the cost.

But as details of the deal start to become available, it is emerging that the mega project has stark similarities to the controversial Standard Gauge Railway (SGR) contract which was handed to a Chinese company in another sweet heart deal in the run up to the 2013 general election.

The Financial Standard has come across some working papers from insiders at the Treasury and the Ministry of Transport that raise sharp questions on why the project had to be announced in a rush and why it was not competitively done. The brief raises a question as to why the American firm was not allowed to compete with others for the tender if at all it was the cheapest in the market. Government insiders are referring to the project a ‘thank you gift’ to America, given in the spirit of reciprocity, for some unspecified support the US government has extended to Kenya.

Both the contracts of the SGR and the Expressway project were signed shortly before the general elections. The firms constructing them are the ones tasked with determining project costs. Worse, both have been single sourced and were entered in the cover of government to government contracts, in deals that reduce the level of public disclosure and scrutiny that open tenders go through. The biggest concern for sources familiar with government financing is that in both cases, these projects are now going to be financed largely from borrowing, coming at a time when the government is exhausting its headroom to stock up any additional debt. Treasury is understood to be concerned that despite having so much debt that it is struggling to repay for the big projects already underway, it will be required to take a commercial loan to finance land acquisition.
The other concern is whether the road is the most important project at this time given that it is coming to compete with the railway even before the dividends of the rail start being felt. Infrastructure projects The deal has also brought back the American government on the front row seat of firms that have bagged big infrastructure projects after being elbowed out by Chinese companies.

A brief by the State Department of infrastructure as it sought concurrence to proceed with the project says Kenya will borrow funds from American lenders (US Exim Bank and through Overseas Private Investment Corporation (OPIC)) and then sign an Engineering, Procurement, and Construction (EPC) contract to build the road on a single source basis - where the engineering and construction contractor will carry out the detailed engineering design of the project, procure all the equipment and materials necessary, and then construct to deliver a functioning facility or asset to their clients.

The brief queries why a previous model financed by the World Bank was abandoned and how it was determined that the single sourcing approach would offer taxpayers better value for money and would be faster than a Public Private Partnership (PPP). “Although the proposal is being referred to as ‘alternative project concept’ or ‘highway development concept,’ it is simply a non-competitive, single source procurement of an EPC contractor who is able to bring financing with it,” the brief notes. Engineer George Kiiru, the head of PPP at KeNHA told Financial Standard that the government changed its focus from a PPP to EPC because it will be delivered faster as compared to PPP. “Achieving commercial and financial close for PPP contracts can take two to three years thereby delaying the start of construction and completion of the project,” Kiiru explained. “A comparative analysis between a PPP model for a 20-30 year concession shows that cumulative repayments under the PPP approach would be higher compared to the alternative approach with ECA (US Exim/OPIC) support,” Kiiru said. The brief from the State Department of Infrastructure however suggests that there is no reason to suggest that the construction will take longer under the PPP arrangement. “Indeed, there are strong arguments that overall construction period may be shorter under the PPP project as it splits construction between three different EPC contractors. In any event, the constraining factor is always likely to be land acquisition, so it would be a mistake to assume that the Bechtel proposal can deliver construction completion more quickly,” the brief notes.

 KeNHA says the government is yet to determine the exact cost of the project and is waiting for a complete detailed design, which is yet to be undertaken, before it can determine the actual cost. KeNHA also refused to give a cost range of the project on grounds that it did not want to speculate. This is despite the fact that costs are the first considerations in deciding whether or not a project is viable. “This project is a government to government initiative. The US Government nominated Bechtel International to work with the implementing agencies in Kenya to develop the project,” Kiiru reckoned. KeNHA explained that in 2015, the governments of Kenya and the US signed a memorandum of understanding for development of priority infrastructure projects supporting Kenya’s Vision 2030. Kenya later held discussions with the US government, for development of the highway. The American government through the US Exim Bank has provided a letter of support to Bechtel for the Expressway under a proposed government-to-government agreement. “The US Exim Bank has shown interest to finance the project together with other US Export Credit Agencies such as the Overseas Private Investment Corporation (OPIC),” KeNHA said in its response. He said that the Nairobi–Mombasa Expressway will be constructed as a Toll Road, and upon completion, the Government will procure and assign private firms to operate and maintain the highway. Part of the tolled fee shall be applied towards repayment of ECA Loans. KeNHA says a feasibility study has been completed and it shows that the project is viable.

“The expressway will be designed for consistent speeds of 120kph, hence reduce travel time from Nairobi to Mombasa from the current 10 hours, to about four hours.” A source at Treasury who spoke on condition of anonymity said that the plan was to get a private party to finance, build and operate the road for a 30-year period as per a feasibility study financed through a World Bank loan. He revealed that the feasibility study had concluded that the PPP route offered better value for money than the traditional EPC procurement approach. “There is little chance that a contract not competitively procured will be cheaper than an international competitive tender,” noted the source at Treasury who understands government funding procedures. The source seemed to agree with part of the State Department of Infrastructure brief that suggests that Kenyans may not get value for money from a non-competitive process. The brief says Bechtel’s construction costs per kilometer are higher than estimates presented to the Ministry by PricewaterhouseCoopers. Bechtel’s costing proposal is estimated at Sh600 million per kilometer compared to Sh500 million per kilometer estimate given by PWC ($6 million Vs $5 million). “The per kilometer costs under the PPP proposal includes all taxes and duties while Bechtel’s proposal assumes complete tax exemption for the project (corporate tax, income tax and import duties) - which could reasonably be assumed to cost the Government of Kenya an additional $1 million (Sh100 million) per kilometer,” the brief notes. It argues that as part of the American firm’s proposal, an advance payment of $300 million (Sh30 billion) and also a payment of $100 million (Sh10 billion) as ‘establishment fee’ will be required. “So Bechtel will be given $400 million  (Sh40 billion) in funds and highly cash positive before the start of the project whereby the Government of Kenya will be paying interest on this sum from day one as this will be drawn immediately by Bechtel at contract signing,” the brief notes. There is also a further $60 million (Sh6 billion) of design management fees. The proposal from the American firm excluded all relevant taxes. The Government is pushing for the deal on grounds that the US firm is one of the biggest construction companies in America and that this should give Kenyans comfort. Since the firm will also be seeking financing on its own, it also takes away the initial headache of having to source for financing. But what the government is not saying is that Kenyans will eventually pay a premium price for it in one way or another. Bechtel is also not free from controversies in overseas countries where it has operated. For example, it is fighting some bribery allegations in a Saudi Arabia family feud, which is now in court.

There were other allegations on using middlemen named in British courts to win a contract in Abu Dhabi to build a petrochemicals plant. A former vice president of the firm was also sentenced to 42 months in prison for accepting Sh520 million in kickbacks to manipulate the competitive bidding process for the State run power contracts in Egypt. The other point of conflict is the sharing of risk. It is understood that the American contractor allocates itself the time and materials risk but passes on the price, quantity and overrun risks to the Kenyan taxpayer. The project was expected to start by June 2010 but sources say the National Treasury delayed the project because it needed to allow contractors time to carry out due diligence of the project in order to transfer price and quantity risks to the contractors. Unit rates Bechtel contract is based on Unit Rates for elements of work based on historical cost and production data. This exposes the taxpayer to contingent liabilities because unit rates become firm when the design is completed. Though no one is willing to share the estimated costs of the project, the State Department of Infrastructure brief suggests that the contract price will be at least $2.5 billion (over Sh250 billion). The brief says 80 per cent of the contract costs – quantities and prices - are not fixed and this may see the additional costs spill over to the taxpayer Given the other costs associated to the project like getting land, the price of the project could further go up after the design is completed.

A source at Treasury says the project will cost just as much as the SGR, whose contract price was Sh327 billion but other costs such as land compensation and finance costs have pushed it up to near Sh500 billion. “If indeed, Bechtel is cheaper, then they can still tender under the proposed PPP project model and seek for financing themselves from OPIC or Exim Bank at their preferred cheaper rates,” the brief reads. The brief had advised that the proposed method of developing the road under the Bechtel Proposal is not the best to the government, and asked KeNHA not to proceed, instead use the procurement process under the PPP arrangement, where Bechtel would be advised to participate alongside others. This advice was howver overruled.

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July 11, 2017

ONLY 10 percent of the surfaced (tarred) national road network is in good condition, with 30 percent in poor condition while 57 percent is in fair condition, a senior Government official has said.

About 3 percent of the road network has been unclassified, 1 percent of gravel and earth roads were certified to be in good condition, 22 percent was in fair condition, 72 percent was said to be in poor condition while five percent was unclassified at this stage.

In response to this situation, Government has initiated a number of road rehabilitation projects, including building new ones. Some of the road rehabilitation projects initiated through the Ministry of Transport and Infrastructure Development include. . .

Tenders will be awarded on a Build Operate Transfer (BOT) basis for the Beitbridge-Bulawayo-Victoria Falls, Harare-Nyamapanda and Rutenga-Boli-Sango roads before the end of this year.

Currently, feasibility studies and detailed engineering designs are underway for the Beitbridge-Bulawayo road and should be completed by August this year, after which tenders will be floated.

Transport and Infrastructure Development Minister Dr Jorum Gumbo said Government had made significant investment into the road network and more funds would be channelled towards infrastructure. The minister said about $300 million had so far been channelled into infrastructure development, including road rehabilitation.

"Some $13,28 million was spent on rehabilitation and maintenance of road infrastructure in 2015 and $11,44 million in 2016. At the same time, rehabilitation of the Plumtree-Mutare road was done from 2012 to 2016 at a cost of $206 million," said Dr Gumbo.

"In the aviation sector, the major investment has been upgrading of Victoria Falls Airport in the last three years to December 2016, at a cost of about $150 million. There was also some money spent on rehabilitation of the runway at Harare International Airport," he said.

All the road works were funded by the Zimbabwe National Road Authority and the Ministry of Finance and Economic Development.

"There has been no private financing of transport infrastructure development since the New Limpopo Bridge in 1994 and Beitbridge-Bulawayo Railway (BBR) in 1998.

"The Plumtree-Mutare project was financed through a loan obtained by ZINARA from DBSA (of South Africa). Victoria Falls Airport was financed by a loan to Civil Aviation Authority of Zimbabwe from China," said Dr Gumbo.

Minister Gumbo said the National Railways of Zimbabwe also carried out some rehabilitation work on the national railway network.

The condition of the country's road network had deteriorated since the last condition survey in 2010. At that time, 20 percent of the national road network was assessed to be in good condition, 30 percent in fair condition and 50 percent in poor condition. Ongoing road projects include the dualisation of Beitbridge-Harare-Chirundu highway, including the Harare Ring Road.

"The construction team has started arriving from China, and construction is expected to start in September this year," he said.

"We are also going to construct Phase 2 of the Harare International Airport Road. The late commencement has been due to delays in carrying out the required feasibility study. Again this will be done and project implementation will commence before the end of the year." the Minister added.

More funds, especially foreign direct investment, could have been channelled towards road projects, among other infrastructure development projects, but lack of appropriate and adequate legislation governing Public Private Partnerships was a hindrance.

"However, we now have the Joint Venture Act, and we trust that from now on we will be able to attract significant levels of FDI in transport infrastructure development," the Minister added.

Source - Bulawayo

February 17, 2017

Bitumen in Road Construction

Bitumen is used in road construction due to various properties and advantages it has over other pavement construction materials. Advantages of bitumen for road construction is discussed.

Why is Bitumen Used in Road Construction?

Bitumen gain certain unique properties that are inbuilt in it during its manufacture. The bitumen as a raw material in flexible road construction and bitumen as a mix (composing other materials i.e. aggregates/ pozzolans) serves certain advantages, that prompt to use bitumen widely in road construction.

Use of Bitumen in Flexible Road Construction

The reason behind the significant application of bitumen in flexible pavements are explained below:

1. Production of Bitumen is economical

Bitumen is a by-product of crude oil distillation process. Crude oil itself is a composition of hydrocarbons. The primary products that are available are the petrol, diesel, high octane fuels and gasoline.
When these fuels are refined from the crude oil, the bitumen is left behind. Further treatment of by-product, to make it free from impurities give pure bitumen.
As the primary product demand is of utmost importance to the society, the bitumen as a by product has survival for long. This by product is utilized as a new construction material, without going for any other new resource.

2. Physical and Rheological Properties of Bitumen bring Versatility

The physical and the chemical properties of Bitumen are found to be a function of load level, temperature and the duration of loading. It is a thermoplastic and viscoelastic material.
These dependencies make us to truly access the traffic on the road so that a bitumen mix properties can be varied based on the stress levels calculated. This versatility of bitumen results in a large variety of bitumen mix, based on the road application.

3. The Melting Point of Bitumen is low

It is highly appreciable about the fact that bitumen has a favorable melting point, that helps in both surface dressing and wearing resistance with ease.
The melting point of the bitumen should not be too high, that it can be melted easily during laying the pavement. At the same time, bitumen has a melting point, which would not let the already casted road pave to melt and deform under high temperatures.
In areas of high temperatures, along with this quality of bitumen, the aggregate composition helps to cover up the effect of large temperature.

4. Bitumen can undergo Recycling

As the melting point of bitumen is favorable, it can be melted back to its original state. This is called as asphalt recycling process.
The torn-up asphalt pieces are taken up to the recycling plant, instead of sending them to landfills. This recycled mix can be reused. If necessary, the old bitumen is mixed with new bitumen and new aggregates to make the mix live again.

5. Bitumen gain Adhesive Nature

As explained in the production of bitumen, it is free from hydrocarbon and hence not toxic. The by product is refined to maximum to get rid of organic materials and impurities.
The bitumen has a highly adhesive nature, which keeps the materials in the road mix bind together under strong bonds. These become stronger when the mix is set i.e. ready for vehicle movement.

6. Bitumen has Color Variety

The traditional bitumen is black in color. This is because the dense organic material within bitumen is black in color. Now, when certain pigments are added to bitumen, the color of our choice can be obtained. These are colored bitumen.
It is costly than the normal colored bitumen. The disadvantage of colored bitumen is that it requires more chemical additives and materials.

Requirements of Bitumen Mixes for Road Construction

An overall bitumen mix is used in the construction of flexible pavement to serve the following needs.
  • Structural Strength
  • Surface Drainage
  • Surface Friction

Structural Strength of Bituminous Pavements

The figure below shows a typical cross section of flexible pavement, that was developed in the USA. The structural bitumen layer composes of:
  • Bituminous surface or wearing course
  • Bituminous binder course
  • Bituminous base course
The primary purpose of these bitumen mixes is structural strength provision. This involves even load dispersion throughout the layers of the pavement. The loads involved are dynamic or static loads, which is transferred to the base subgrade through the aggregate course.
A granular base with a bituminous surface course is only provided for roads of low traffic. It is just sufficient and economical.
The rebounding effect of bitumen upper layers helps in having resistance against high dynamic effect due to the heavy traffic. Rebounding property is reflected by the stiffness and the flexibility characteristics of the bitumen top layers. When looking from bottom to top, the flexibility characteristics should increase.
Studies have shown that the above mentioned characteristics of aggregates are attained using densely graded bitumen mixes. This mix should make use of nominal maximum size aggregate (NMAS), that must decrease from the base course- binder course – surface course.
The nominal maximum size aggregate (NMAS) = One sieve larger than first sieve-to retain more than 10% of combined aggregate.
There is a higher amount of bitumen content in the wearing course, that make the layer more flexible. This would help in increasing the durability.

Surface Drainage of Bituminous Pavements

Subsurface drainage can be facilitated using granular sub base in the construction of flexible pavement. Permeable asphalt treated base (PATB) can be used to provided positive surface drainage in major highways. This would behave as a separate course for facilitating subsurface drainage.

Surface Friction of Bituminous Roads

It is essential for the pavement layer to provide enough skid resistance and friction, during vehicle passage, especially in wet condition. This would ensure the safety of the passengers. The macro and the micro surface texture of the asphalt mix contributes towards the surface friction.

The mix gradation i.e. open graded or dense graded will contribute to macro surface texture. The open graded mix have higher macro surface than dense graded. The water is squeezed out from the bottom of vehicle tire when the high macro surface texture is implemented.
The micro surface texture is contributed by the aggregate surface, that is exposed when the above bitumen layer is torn.

Advantages of Bituminous Road Construction Over Concrete Pavements

1. A smooth Ride Surface

It does not make use of any joints; Hence provide a smooth surface to ride. It also gives less sound emission when compared with concrete pavements. The wear and tear are less in the bituminous pavement, thus maintaining the smoothness.

2. Gradual Failure

The deformation and the failure in the bituminous pavement is a gradual process. The concrete pavement shows brittle failures.

3. Quick Repair

They have an option to be repaired to be quick. They don’t consume time in reverting the path for traffic; as they set fast.

4. Staged Construction

This helps in carrying out staged construction in a situation when problems of fund constraint or traffic estimation problems are faced.

5. Life Cost is Less

The initial cost and overall maintenance cost of bituminous pavement are less compared to concrete pavement.

6. Temperature Resistant

They act resistant against high temperature from melting and are not affected by de-icing materials.

Disadvantages of Bituminous Pavement

  1. Bituminous pavements are less durable
  2. Low tensile strength compared to concrete pavement
  3. Extreme weather and improper weather conditions tend to make bituminous pavement slick and soft.
  4. Bitumen with impurities can cause pollution to soil, hence ground water by their melting. These may have hydrocarbons in small amounts.
  5. Clogging of pores and drainage path during construction and service life
  6. More salting- to prevent snow during winter season
  7. Cost of construction high during extreme conditions of temperature

Source - enggfeed