Showing posts with label MC70. Show all posts
Showing posts with label MC70. 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


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

January 12, 2018

Paving Vision

A paving vision unfolds

The construction and maintenance of roads are among the top priorities for government. IMIESA speaks to Steve Tinarwo, managing director, Instant Tar, about the company’s plans to grow its base in this strategically important sector.

The commissioning of an 80 tonne per hour Apollo Counter Flow 90 continuous mixing plant in February 2017 at its Benoni facility in Gauteng represents a key milestone for Instant Tar. This major plant acquisition spearheads the company’s strategic vision of becoming a top-tier paving contractor and asphalt supplier in the South African and broader Southern African region.

Three mix designs are currently produced by the plant, namely medium asphalt, a bitumen-treated base (BTB), and fine asphalt. The Apollo plant is owned by sister company V&S Plant. Currently, V&S is operating on a temporary licence; however, an application for a full commercial licence is due to be completed during the second quarter of 2018.

“Our goal, from the onset, was to provide a turnkey solution in asphalt pavement construction and the acquisition of our Apollo plant now means that we have complete control over the supply chain,” explains Steve Tinarwo, managing director, Instant Tar. “That’s important from a reputation management perspective, as it means we don’t need to rely on third parties when it comes to project delivery.”

Instant Tar is currently a 5 CE PE contractor in terms of the Construction Industry Development Broad (CIDB) grading system and has gained extensive experience as a subcontractor working on projects across South Africa. “Our plan in 2018 is to apply for an upgrade to a CIDB 7 level, so that we can tender on a broader range of projects,” explains Tinarwo.

The company is 100% black-women-owned. “In fact, we’re the only black contractor in Gauteng that owns an asphalt plant,” he continues. Instant Tar is also a member of the Southern African Bitumen Association, ensuring it keeps up to date with current industry regulations and standards.

From civils to paving
Established in 2007, Instant Tar’s current business model has progressively evolved. Initial activities concentrated on general civils work, like earthworks, stormwater drainage structures and concrete block paving, which it still offers on request as part of a total project  solution.

Having identified a gap, the company refined its strategy in 2008, shifting to a specific focus on asphalt paving – ranging from pothole patching, to residential driveway and light commercial parking area surfacing. This has been supported by a steady acquisition of specialised equipment, starting with a walk-behind pedestrian roller.

Instant Tar’s first paver was acquired in 2010, subsequently followed by pneumatic and compaction rollers that have opened up opportunities into a much broader market for urban and national road resurfacing. Instant Tar’s current paver units include a Vögele 1603 (equipped with a 5 m screed), a Wirtgen Super 800 (3.4 m screed) and a Blaw-Knox unit. Allied equipment includes chip spreaders, pneumatic and double-drum rollers, and tipper trucks.

The company now also owns two low-bed trucks, which enables the rapid deployment of machines nationally for projects in diverse geographic locations, such as the Eastern Cape, KwaZulu-Natal and Limpopo.

Ongoing projects within the Gauteng region include subcontract work for the Johannesburg Roads Agency (JRA), the City of Ekurhuleni, and the Gauteng Department of Roads and Transport. One of Instant Tar’s recent breakthroughs took place in the recycling market, and the company recently completed an R8 million project for the JRA, working as a subcontractor.

“Whether it is for a patching, resurfacing or complete surface construction job, Instant Tar provides expert advice and ensures that the appropriate materials are used,” says Tinarwo. Instant Tar also provides a road marking service. The solutions offered are solvent- and water-based road markings.

SMME support
“There’s a definite opportunity for SMME contractors when it comes to earthworks projects, but the high cost of acquiring specialist paving plants still represents a major barrier to entry for most emerging companies. Plus the saving segment is not generally catered for by the plant hire industry.

So, Instant Tar is well-placed for growth,” says Tinarwo. “However, we can create joint ventures with SMME civils contractors. This enables them to tender on multidisciplinary roads projects where Instant Tar is responsible for the black-top surfacing phase.”

In the longer term, Instant Tar has an ambitious vision of being one of the top five asphalt suppliers within the SADC region. “As we expand, one of our future acquisitions could include a mobile asphalt plant, which would be ideal for supplying the megaprojects we hope to secure in the future as we climb up the CIDB rankings,” he expands.

Outside South Africa, Instant Tar has a registered company in Zimbabwe, trading as Elshadhai Civil Construction. With the outlook in Zimbabwe starting to show marked improvement, Instant Tar plans to establish a full road paving line during 2018 to respond to local project opportunities.

“In the meantime, our intention is to grow our municipal footprint in South Africa, while concurrently strengthening our relationships with key suppliers, since they play a critical role in ensuring that we provide high-quality solutions,” concludes Tinarwo

Source - Infrastructure News

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 28, 2017

Another Tender War

Work on white-topping of roads is set to begin and around 30 roads stretching 93.47 km will be white-topped in two phases. The tender process for the project, which has been divided into two packages, has been completed.

The first package has been handed over to NCC which involves six roads and six circles. The second package involves 24 roads and the contract has been handed over to Madhukan. The companies have been given 11 months to complete the project.

“Roads will be white-topped on the lines of Nrupathunga Road. Work will start by October,” said Bruhat Bengaluru Mahanagara Palike (BBMP) commissioner N Manjunath Prasad.

He also said the stretch along Mysuru Road-Sumanahalli Junction-Goraguntepalya-BEL Circle-Hebbal-KR Puram will be taken up soon since the traffic here is heavy. “We are trying to reduce the inconvenience caused to motorists as much as possible and hence we have instructed the contractors to complete the project within six months,” said Prasad.

“We need to completely bar vehicular movement during the project. We will create alternative routes during this period in consultation with the traffic police,” said K T Nagaraj, BBMP chief engineer, (projects).

He also said work will 
be taken up according to the availability of the paver machines which are used for white-topping.

Around six circles are being white-topped in the project. The circle near Ramakrishna Ashram, Lalbagh West, North and East gates, near Siddapura Teacher’s College and Bhashyam Circle will be white-topped. A total of Rs 21.24 crore is being spent on this. “These works come under Package 1,” said Nagaraj.

White-topping, or concretisation, gives roads a life of up to 25 years and results in fuel savings of 14%. The Centre for Smart Cities (CSC) Research had recommended that white-topping helps in reducing traffic and increasing the lifespan of the road. The state government has allotted Rs 2,000-3,000 crore under the Nagarothana scheme for this project.

Source- Deccan Herald

September 27, 2017

Mombasa to Nairobi- The Political Road

In another three years, a Kenyan travelling from Mombasa to Nairobi will have at least four major options Kenya has chosen to build a brand new road between Mombasa and Nairobi instead of expanding the existing highway in what will leave consumers spoilt for choice Transport CS James Macharia said the deal had not been signed and that several other companies could be allowed to bid Kenya has chosen to build a brand new road between Mombasa and Nairobi instead of expanding the existing highway in what will leave consumers spoilt for choice.

The Sunday Standard has established that instead of turning the current road into an expressway, the government decided to construct a completely new road to run side by side with the existing one. ALSO READ: Kenya Railways threatens top managers of RVR This means that in another three years, a Kenyan travelling from Mombasa to Nairobi will have at least four major options. One may choose the Standard Gauge Railway (SGR) passenger train that takes about five hours or take a flight and land in the coastal town in an hour. If he wants to travel by road, he will have two roads to pick from. If in a hurry, and would like to drive at speeds of 120 kilometers per hour, he will take the expressway whose contract was handed to an American firm, Bechtel, three days to the General Election in a deal described as a ‘thank you gift’ to the Americans.

This will not just be the most comfortable drive given how smooth the road would be, it will just take him three and-a-half hours. But this will not be without a cost. He will have to part with some unspecified amount of money in toll fees to enjoy the road. If he does not want to pay or is not in a hurry, he will still have the current road at his disposal, which will be available but only for smaller vehicles. The current road will also have been downgraded to stop trucks and big buses from using it. Shelved proposal It will also mean that the government will buy land afresh, in a similar fashion as it did before it build the SGR, in what could provide land cartels with another round of minting millions from government projects. The initial proposal, which was shelved in favour of the current deal, involved expansion of the existing highway to four lanes between the Machakos Turnoff to Mariakani.  ALSO READ: Kenya Railways threatens top managers of RVR It has also emerged that the contractor building the controversial expressway will be allowed to ‘sell’ it to another private contractor, who will charge users toll fees to recoup the billions sunk in the project.

“Under the Exim Bank financing model, the government has the opportunity to privatise or securitise the individual sections of the expressway that could reduce the total borrowing requirements,” Engineer Peter Mundinia, the director general of the Kenya National Highways Authority (Kenha) said in a statement. The authority, however, refused to comment on the cost of the project. A source familiar with the project says the government will pass the road to private investors, who have the experience to monetise the road. “Private investors will buy the road and charge toll fees in line with the initial Public Private Partnership (PPP) model after it is constructed.

This must not wait until it is fully built but it can start with the sections as they get completed,” a source said in an interview. This will make the multi-billion road the first ‘private road’ in the region. Kenha has contradicted the Ministry of Transport which had denied claims that the contract had been signed. In a press release this week, Kenha said the commercial contract for the project was signed on August 5. Reacting to an earlier story by the Standard, Transport CS James Macharia said the deal had not been signed and that several other companies could be allowed to bid. ALSO READ: Kenya’s Sh300b ‘thank you gift’ road project to US sparks tender wars But Kenha, which handed the project to the American firm without a competitive process, says the development is under its mandate. Available estimates show that the project will cost about Sh300 billion, before the cost of buying the land is factored in.

Kenha says its economic projections show that there is an infrastructural symbiotic relationship between the SGR and the new road as it offers connectivity for people, business and communities along the road. “Once completed, the expressway will play a critical role in improving Kenya’s transportation logistics and trade competitiveness while supporting the spatial and industrial development along the corridor,” Mundinia said. Kenha has defended the decision to opt for the construction of a new road on grounds that it is distinct from the PPP alternative given that it offers a new alignment designed as a high speed six-lane expressway of higher capacity and safety standards.

“The expressway project will include highway capacity through construction of the greater Nairobi-Southern Bypass which has been planned for several years, thereby contributing to decongestion of the fast-growing Nairobi Metropolitan Area,” Mundinia said. But as details of the deal become available, it is emerging that the mega project has stark similarities to the SGR contract handed to a Chinese company in the run-up to the 2013 General Election. Both the contracts of the SGR and the expressway project were signed shortly before the elections. The firms constructing them are the ones tasked with determining the costs of the projects. 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 both of these projects are now going to be financed largely from borrowing at a time when the government is exhausting its headroom to stock up any additional debt.

Kenya Railways set to operate old line It has emerged that top officials of the PPP directorate were caught unawares after the government made an about turn on the project and decided to build a new road instead. A working paper from insiders at the Treasury and the Ministry of Transport seen by this paper raised sharp questions on why the project had to be announced in a rush, three days before the elections, and why it was not competitively done. 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 OPIC) and then sign an Engineering, Procurement and Construction (EPC) contract to build the road on a single source basis. 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 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 the Sunday Standard that the government changed its focus from a PPP to EPC because it will be delivered faster as compared to PPP. Shorter period

 “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 said. “A comparative analysis between a PPP model for a 20-30 year concession shows 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, intimates 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 Betchel 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 that the project is expected to fall in on grounds that it did not want to speculate despite the fact that costs are the first considerations in deciding if a project is viable or not. Costs per kilometre “This project is a government to government initiative. The US Government nominated Betchel International to work with the implementing Agencies in Kenya to develop the project,” Kiiru said. In 2015, Kenha says, 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 US, through the US Exim Bank, has provided a letter of support to Betchel for the Nairobi–Mombasa 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. The brief says Betchel’s construction costs per kilometer are higher than estimates presented to the ministry by PricewaterhouseCoopers (PwC) on construction costs for the PPP approach of Sh600 million per kilometre versus Sh500 million per kilometre ($6 million Vs $5 million). “The per kilometre costs under the PPP proposal includes all taxes and duties while Betchel’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 an additional Sh100 million per kilometre,” the brief notes. It goes on to argue that as part of the American firm’s proposal, an advance payment of Sh30 billion and also a payment of Sh10 billion as ‘establishment fee’ will be required. “So Betchel will be Sh40 billion in funds and highly cash positive before the start of the project whereby the government will be paying interest on this sum from day one as this will be drawn immediately by Betchel at contract signing,” the brief notes. There is also a further Sh6 billion of design management fees. The proposal from the American firm excluded all relevant taxes.

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Road Upgrade

Council to spend $1m on road upgrade

Last week, official manager Mark Blackburn voted to hire Palmerston-based contractor JLM Civil Works for the job.
“I think this is a straightforward contract,” he said.
A report by Melissa Moss, Environment and Strategic Support Officer, recommended awarding the tender — worth $1,058,389.64 — to the company.
Also vying for the contract was local company Ciarla Constructions, who tendered $1,413,054.80; and BMD Urban which has its head office in Queensland.
Ms Moss said each contract was weighted on local industry; past performance experience; resources and methodology knowledge and skills. “All Contractors assessed by the tender evaluation committee were identified as being capable of performing the works to the standard described in the tender documents,” she said.
“After evaluating all tenders against both the price and non-price criteria, the tender submitted by JLM Civil Works Pty Ltd, was considered to offer best value for money.”
Ms Moss said three tenders were submitted, though nine were downloaded.
Former chief executive Ricky Bruhn, who quit last week, said it was the second time the project had come before council.
“We got a better response this time round,” he said. 
“We’re hoping to start this project as soon as possible — before the rain starts.”
In July, Palmerston Council voted not to accept any tender for the Yarrawonga and Wallaby Holtze Road upgrade, as none were deemed suitable.
At the time, Mr Blackburn voted to tender the project again, as the only tender recieved exceeded the current budget allocation.
The revised tender included outcomes from a flood mitigation/drainage study carried out by the NT Government.

September 21, 2017

Tender Sytesm Vs Cops

Systemic delay in repairing roads.Systemic delay in repairing roads.

HYDERABAD: The long-drawn tender process followed by the Greater Hyderabad Municipal Corporation (GHMC) for relaying dug-up roads should either be done away with completely or streamlined to put the city's road infrastructure back on track, feel traffic cops.

Pointing out that currently it takes at least six months to complete just the tender process for restoration of dug up roads, which the city just cannot afford, traffic cops said there are several instances of road stretches being dug up repeatedly and not being re-surfaced, leaving behind un-motorable roads as the civic body's tender process takes its own sweet time.

As per the current system, when an agency seeks permission from GHMC for road digging, cost of required restoration work has to be submitted by the agency to the civic body before taking up the work. However, the tender process for restoring roads starts only after digging is completed.

"While it not possible to refuse permission for any development work, in most cases the contractor just dumps mud or loose gravel on the stretches. It is the gap between the completion of work and the actual filling of the road that results in traffic woes. We have suggested that the procedural fulfilling of tender be done away with and the road be filled immediately after the work is done," said AV Ranganath, deputy commissioner of police, traffic (Hyderabad II).

In fact, Malkajgiri, Anandbagh, Banjara Hills (Road No 5), Ayyappa Society , Secunderabad, LB Nagar, Bowenpally , Madhavpuri Hills, Chandanagar, PJR Enclave, KPHB and Sultan bazaar are examples of areas where such dug up road stretches have become a never-ending nightmare.

"The Maharani Jhansi Road from Putlibowli Chowrasta to Afzalganj has been in a poor condition for the past two ye ars. Only surgical repair work by pouring bitumen is done after the frequent digging work," complained resident Balasubramanyam Perugu.


Yingo !! Faashtu Traaku antay Naakishtamochhinonkisthaa .. annattu .. Gadhay Dora & Son (P) Ltd ku gaavaalay .. Ovvallathono Jeppichhi, Nijamganay Sathrolaipoyindhi "processu" anjeppi S... Read MoreArey O Sambha

Chandramohan Singh, a resident of Marredpally , said, "The road from Reliance Fresh super market to the check post in West Marredpally was repaired about six months back but is back to its potholed self. Even the road near Lions Hospital, which was dug up for laying drainage pipes, has not been restored."

While GHMC authorities admitted the tender process takes at least two months, they said that in the case of Malkajgiri the delays stretched to nearly a year because the payment was completed only recently by Water Board, which has taken up pipeline laying work. "Once the work is completed, estimates are drawn up and sent for sanction. Then a tender is called for and a contractor is decided. The process requires at least two months.While dealing with other departments we can't press for payment beforehand," said M Shanker, deputy chief engineer, maintenance, GHMC.

Source- Times of India