Showing posts with label PMB. Show all posts
Showing posts with label PMB. Show all posts

January 2, 2019

Infrastructure Boom

Controversial tender system allows Turkish companies to dominate World Bank public investment list



Five of the world’s top 10 private sponsors of public infrastructure projects are Turkish companies, figures in the World Bank’s 2018 Private Participation in Infrastructure Database show.
Limak Holding, Cengiz Holding, Kolin, Kalyon and MNG Holding are the Turkish companies crowding the top 10, where they are joined by companies from Brazil, Germany, the United States and France.
The heavy Turkish presence on the list reflects Turkey’s status as one of the world’s highest investors in infrastructure projects. The World Bank’s data places Turkey as the fourth highest with $143 billion worth of investment, after Brazil, India and China.
The increased investment that brought Turkey back to the top five in 2018 was largely thanks to four highway megaprojects, the World Bank’s report said.
However, the number of Turkish companies on the list is likely down to Turkey’s private-public partnership system, which has been used to fund a diverse array of megaprojects that includes bridges, ports, roads, airports and even the planned construction of a massive canal that will join the Black Sea and Marmara Sea, turning Istanbul into an island.
High-profile projects still under construction include a new airport in Istanbul, where a soft opening was held in October. The airport, which is planned to be the world’s largest when construction is finally complete, is being built by a consortium of five companies, four of which - Limak, Kolin, Cengiz and Kalyon – feature in the World Bank’s list. The fifth, Mapa Construction, is a Saudi-based company.
Turkey’s Justice and Development Party (AKP) government has gained great political capital from the projects completed in Turkey using this system, and the long list of successful infrastructure projects serves as an inexhaustible source to draw from when AKP politicians are challenged to defend their party’s achievements over 16 years in power.
However, critics say the system has been used as a way of giving out handouts to the government’s clients. It allows private companies granted tender on the projects to make an initial investment and construct the infrastructure, after which they are granted the license to operate it for periods often reaching decades.
One of the main sources of criticism stems from the guaranteed income the government often grants these companies during their tender period. Agreements may stipulate that, in the event that a tender-operating company’s revenues from the infrastructure projects do not reach a certain level, the government will pay the difference.
This has led at times to massive pay-outs from the public coffers to contractors. That the income is often guaranteed in dollars or euros has exaggerated public losses even further this year, as the lira lost value heavily against international currencies.
With the revelation that five Turkish companies had done enough business in this fashion to enter the World Bank’s top ten list, Turks on social media quickly pointed out that none of these five companies were among the list of Turkey’s top taxpayers.
A glaring example demonstrating the shortcomings of the AKP’s public-private partnership system came with the construction of an airport designed to service the three western Turkish provinces of Kütahya, Uşak and Afyonkarahisar.
The income guaranteed to the contractor, IC İçtaş, is based on passenger quotas of hundreds of thousands of passengers per year. However, over the first five years in operation, the passenger numbers have fallen 95 percent short of these quotas, a figure that has cost the Turkish public over 20 million euros to date.
With the company granted tender until 2044, that figure if it maintains its current rate will rise to over 200 million euros in total – a figure that dwarfs its initial 50 million-euro investment.
Source - AHVAL

December 14, 2018

NHAI repeals tender

Elevtated Road project has been cancelled
By UdaipurTimes Team on December 14, 2018


National Highways Authority of India (NHAI) has repealed the tender that was floated for the elevatted road in Udaipur – from Court Chauraha to Udaipol.

In 2016, the Rs 136 Crore project was approved by the State Government and NHAI was asked to execute the project  by means of its regular tendering process, and NHAI had processed the tender.

However, a public interest litigation , followed by appointment of consultants by the NHAI to look into the project feasibility even after the State Government had given approval, subsequent intervention by the court recently and finally questioning on the feasibility reports by the CRRI to NHAI, resulted in the NHAI cancelling the tender and the project.  There will no longer be an elevated road in the congested areas of the city.

Hearing the Public Interest Litigation (PIL), Rajasthan High Court had put an interim stop on proposed elevated road in Udaipur. The High Court has issued a notice to National Highway Authority of India, Collector of Udaipur and others in this regard.


Two member bench of Chief Justice, Rajasthan High Court, Pradeep Nandrjog along with Justice Vineet Mathur head the PIL and issued a notice to NHAI, PWD, Udaipur Collector and others seeking a response till 30-July 2018.

The High Court had directed the CRRI to review the project and CRRI had asked NHAI to submit the report, following which NHAI cancelled the entire project and the tender that was issued.

This was the proposed project and the problems accompanying it:

Elevated road planned to be constructed from Udiapol to Court Chauraha (Elevated Road length: 1.65 km; Cost: Rs 126-130 Crore)
Project to have been executed in time and completed by 2021
On completion, the traffic situation in the heart of Udaipur would have eased considerably.  Vehicles needing to move from near Hiran Magri/Udiapol would go use the elevated road.  Only vehicles needing to come into the Delhi gate Surajpol, and such internal areas will need to use the existing roads.  This would ease traffic considerably.

DPR of the consulting agencies for the elevated road raised plenty of technical faults with the plan and said that the project was unfeasible.
A report submitted by the NHAI also confirmed that the project was unfeasible.
Project feasibility mentioned that road was not as per Road Congress standards…viz.

Buses, trucks and HTVs will not be allowed to use the elevated road.
Udiapole road is around 90 feet now; out of this 50 feet will be taken in for constructing the fly-over. A service road will be made underneath which will be used by buses and HTVs. The service road will be of 41 feet in this case. Because of this only 20 feet road on each side will be free which is very likely to create traffic jams.

Speed limit for vehicles has been determined at 40 km/hr whereas as per IRC it should be at least 60 km/hr. Hence speed limit is not as per standard rules.
There is no provision of footpath on the elevated road. Any pedestrian on this road is sure to face risk while on the road.

The Public Interest Litigation was filed by Om Prakash Khatri, JS Dave and Udaipur Citizen Society and others. Representing the applicants, Senior advocate M S Singhvi, Sanjay Mathur and Akhilesh Rajpurohit said that regulations and provisions related to road crossing have been overlooked in the proposed flyover at Udiapole and the elevated road. They also alleged that the design of the proposed flyover has technical faults and raises severe issues related to public security.

Finally, the High Court has also, in its order said that the elevated road project, if it ever comes up in future, will take into cognizance the current decision by High Court and NHAI and will seek approval from the High Court before proceeding.

Source- Udaipur Times

December 3, 2018

Railway Bridge Replacement

Three Halifax railway bridges to be replaced


Vehicles pass over the railway bridge on a road in Halifax on Friday morning. CN is proposing to put a temporary bridge in place while the current bridge is repaired. (RYAN TAPLIN/ STAFF)
Vehicles pass over the railway bridge on a road in Halifax on Friday morning. CN is proposing to put a temporary bridge in place while the current bridge is repaired. (RYAN TAPLIN/ STAFF)
Traffic movement through a significant portion of peninsular Halifax will be affected next year when Canadian National Railway Co. begins work to replace three dilapidated railway bridges in the city’s south end.
CN fought the city over who was responsible for maintaining seven railway bridges in the south end and therefore responsible for their replacement, but the matter has been settled after a protracted legal fight with the railway given responsibility for replacing the structure and the regional municipality obligated to pay for road and utility repairs.
Halifax Water is seeking an additional $1.4 million for the Quinpool Road CN Rail utility bridge.
Previous funding of $697,000 for the road bridge’s water and wastewater infrastructure replacement was approved by the Nova Scotia Utility and Review Board as part of the 2018-19 capital budget.
“At the time of budget preparations, it was assumed that the new water and wastewater piping would be installed in a similar methodology as existing conditions,” wrote Carl Yates, general manager of Halifax Water, in a funding request to the utility board on Thursday.
The current water and sewer infrastructure, installed in 1916, are in the concrete arch.
“Unfortunately, the thickness of the new concrete arch prevents the installation of new utility lines because the road base is too shallow to accommodate new mains,” said the general manager.
Hatch, an international engineering company with an office in Halifax, is CN’s bridge design consultant. It has recommended a separate utility bridge be constructed next to the existing road bridge to avoid the expense and risk of having to temporarily pump or convey wastewater around the construction site.
The consulting company’s revised cost estimate was $743,948, excluding HST, said Yates.
In order to make the scheduled start date of April 2019, the project was broken into two tenders, said Halifax Water’s general manager.
The tender for supply of the utility bridge was awarded to Algonquin Bridge for $195,438, excluding HST.
Construction of the utility bridge, which will span the rail-cut on the north side of the existing bridge, is to be carried out this winter, said Yates.
A second tender, for installation of the bridge and relocated services, closed on Nov. 15 with submissions from Atlantic Road Construction and Paving Ltd., Dexter Construction and Brycon Construction for $1.48 million, $1.484 million and $1.815 million, respectively. The tender will be awarded based on funding approval from the utility board.
Coun. Shawn Cleary, who represents the area that includes the Quinpool Road bridge, said replacing the bridges is a safety issue and is at the point “where it’s got to be done.”
“One of the first questions I had when I got elected was, ‘Why are those there, why do we need to protect pedestrians?’” recalled the district councillor about the jersey barriers around the bridge in a phone interview.
“I remember the look on our transportation directors’ faces, they said: ‘Councillor, they’re not there to protect pedestrians, they’re there to protect the bridge.’ Because if someone hits them, I mean those railings will just collapse and they’ll go down,” Cleary said.
“Thankfully, we don’t have to pay for the bridge itself,” said the councillor.
“The municipality’s capital budget has allocated $845,000 for the bridge rehabilitation on Quinpool Road,” states the HRM website.
The Quinpool Road bridge is one of three CN-owned bridges to be rehabilitated in 2019.
Belmont-on-the-Arm and Marlborough Wood arch bridges are also to undergo repairs next year, with funding from the municipality yet to be determined.
The three structures are predicted to cost the municipality $1.8 million, based on preliminary estimates provided by engineers, states the website.
CN did not respond to request for comment.

December 1, 2018

Procurement Model - Progressive or Blocking


SHINOVENE IMMANUEL and TJIPENANDJAMBI KUHANGA
THE Central Procurement Board has told the Roads Authority to re-advertise two highway road tenders worth N$1,4 billion.
However, the Roads Authority, a parastatal tasked with constructing and managing national roads, believes that the procurement process will delay the projects for more years.

The highways in question include the Windhoek to Okahandja road which would be extended by 21 kilometres for N$1 billion while the Swakopmund to Walvis Bay road will be extended by eight kilometres for N$435 million.

A person familiar with this matter said the Central Procurement Board informed the Roads Authority about its decision last month.

The Namibian understands that the tender agency initially told the roads parastatal to also re-advertise the Windhoek to Hosea Kutako International Airport tender, but that decision is still being discussed.

The decision by the Central Procurement Board comes after Roads Authority chief executive Conrad Lutombi wrote to the transport ministry on 2 February 2018, recommending that the three companies which are currently constructing the highways should be given extensions to work on the next kilometres, which would rule out advertising the tenders.

The Roads Authority has in the past warned that these projects would be delayed and it will cost the government more money if the contracts are re-advertised. The Roads Authority believes that it will be cheaper to continue with the current contractors and save up to N$251 million.

The parastatal is of the opinion that re-advertising the Windhoek to Okahandja road, scheduled for completion by next year as part of the 'Harambee road projects' goals, will delay the project.

Sources said officials at the Roads Authority believe that the Central Procurement Board does not have the powers to award these road contracts because they were awarded by the previous tender regime, which gave parastatals powers to hand out tenders.

The Namibian understands that the Central Procurement Board approached attorney general Albert Kawana earlier this year to obtain a legal opinion on whether the tender agency has powers to award or extend contracts issued by the previous procurement regime.

Kawana declined to comment yesterday while chairperson of the Central Procurement Board Patrick Swartz did not answer a question sent to him on Tuesday.

In the meantime, uncertainty faces the completion of the Windhoek to Okahandja two-way road.

The initial plan was to construct the Windhoek to Okahandja road concurrently in the final phase of the project, but the tender has been delayed for more than two years.

“There is no way we can complete the Okahandja road by next year as promised in the Harambee Prosperity Plan,” a person familiar with the project told The Namibian this week.

Roads Authority spokesperson Hileni Fillemon said the construction of the Windhoek to Okahandja section 4A road is progressing. The current phase consists of the 27km road from Döbra River to the Omakunde interchange.

“Progress on this project is at 78%. Five bridges have been fully completed, and works are progressing well on the bridges/interchanges that we are currently busy with,” she said.

The section is set to be completed by September 2019, she added.

The section 4B, which is 21km, covers the road from the Osona military base to the Otjiwarongo junction – behind Okahandja on the southern side, and it will be turned into a highway.

“The design for this section has been completed, and the Roads Authority is currently engaging the government to secure funds for this section,” Fillemon continued.

The spokesperson said phase one of the Windhoek to Hosea Kutako International Airport road, which stretches from Mandume Ndemufayo Avenue to Sam Nujoma Drive, is 60% completed.

BUDGET CUT

The finance ministry and the transport ministry have over the years clashed over the roads tender. The finance ministry bluntly blamed the transport ministry for committing the government to road contracts worth more than N$2 billion without consulting treasury. Deputy transport minister Sankwasa James Sankwasa said in a letter earlier this year that the roads contracts were riddled with corruption.

There is evidence that the finance ministry reduced the initial budget for the three highway projects.

Documents provided by the transport ministry show that the finance ministry chopped the budget for the three roads projects by N$292 million when the national budget was revised last month.

The Windhoek to Okahandja road, which had an initial budget of N$241 million, was reduced by N$90 million, leaving the project with N$151 million to construct the ongoing road project.

The Windhoek to Hosea Kutako road project was reduced by N$102 million and left with N$47 million. This road is set to be funded by the African Development Bank and a Chinese grant.

The Swakopmund to Walvis Bay two-way road, which had a N$149 million budget, was cut to N$47 million, reducing the project amount by N$102 million.

These project cuts were part of the massive cuts faced by the transport ministry last month.
The ministry's entire budget for this year was reduced by N$700 million from N$2,2 billion to N$1,5 billion.

Director in the works department at the Ministry of Works and Transport, Anneline Black told The Namibian two weeks ago that the finance ministry did not consult them when it chopped the budget of 29 out of 44 projects at the cost of N$700 million.

“The Ministry of Finance did not consult the line ministries on the budget cuts of the development budget,” Black said.The finance ministry did not respond to questions about the lack of consultations.
The ministry of works indicated that the upgrading of the railway network was also cut by N$103 million from an initial budget of N$371 million.
The transport ministry is also faced with a poor implementation record.

Black, who was acting as permanent secretary of the transport ministry, said 21 out of 44 projects were not implemented for this financial year due to the lack of money.

The ministry did not respond to questions about the projects budgeted for but not implemented.
Black, however, said the ministry is still making some progress, despite the budget cuts.

“After having looked at all the affected projects, I can in all honesty not see how these project cuts will not negatively impact these projects at all,” she added.

Source - The Namibian

November 23, 2018

Road and Rail Plans

Victoria's debt level to double under Labor road and rail plans

Today Victorian Labor pledged to kick-start work on Melbourne's $15.8 billion North East Link toll road on day-one back in office.
The 26km road, which will connect the M80 ring road at Greensborough with the Eastern Freeway, was first proposed by Labor in 2008.
Premier Daniel Andrews recommitted to the project in 2016 and has already put more than $200 million into planning and design.
This morning he promised to call for construction tenders on Monday if successful at the ballot box.
"The tender process will begin on Monday and I know that there will be significant interest from construction companies both here and abroad to get on and build this road," he told reporters.
He expects construction to start in 2020 and the road to open in 2027. The road will be fully funded by taxpayers.

The premier also pledged three more crossing removals at Deer Park and Ardeer.

The premier alongside transport minister Jacinta Allen.
The premier alongside transport minister Jacinta Allen. (AAP)
The road and rail plans would increase net debt to12 percent of Gross State Product, borrowing $25.6 billion to build North East Link, the Airport Rail Link and level crossing removals.
“We pay some, and our kids… who will be the principal beneficiaries, will also make a contribution to the projects that are so vitally important,” Treasurer Tim Pallas told 9News.
Mr Pallas said the state can maintain its AAA credit rating through a dedicated infrastructure fund that would take a $2.3 billion dividend from Victorian insurers over a four-year period.
The treasurer added that there is “no need for new taxes” to fulfil the government’s election commitments.
“I am not going to constrain the Victorian economy by not being able to make changes where we see the changes are appropriate,” he said.
Both Labor and the Liberal Party have promised to build the North East Link toll road, although Opposition Leader Matthew Guy has said he will review the plans if he wins office.
Mr Guy's seat of Bulleen is affected by the current proposed route.
Roads Minister Luke Donnellan said a review of the project by a Liberal-Nationals government would delay construction.
"A vote for the Liberal party ... will mean it will be delayed, continue to be delayed forever," he said.
Melbourne North-East link design. (AAP)
"The last four years that the Liberal party were in they simply didn't get a major project started and completed in their term."
Mr Andrews said the project "stacks up", unlike the dumped East West Link toll road, which cost the state more than $1 billion to scrap in 2014.
"We have got to accept funnelling people through the centre of the city is not the answer," he added.
"Finishing the ring road will allow people to move around the city that's what stacks up."
Mr Andrews then set off for Deer Park, in the state's west, to announce the removal of three rail level crossings, some of Labor's hit-list of 25 if re-elected.
Victorians go to the polls on Saturday.
With AAP
Watch the full news bulletin on 9Now

November 16, 2018

Credit Union HQ Construction to begin

Construction work is poised to start on a new headquarters for one of Ireland’s largest credit unions after a breakthrough in a legal dispute which stalled the project for years.
The chief executive of Bishopstown Credit Union in Cork, which has almost 21,000 members and assets of €150m, confirmed that the dispute with Dunnes Stores over a small section of land next to the earmarked site on Curraheen Road, has been settled to everyone’s satisfaction.
Pictured, on site, after the official contract signing, were members of the Board of Directors and officials from Cumnor Construction and project team. Pic: Brian Lougheed
The settlement, which did not involve any financial payments, has cleared the way for the signing of contracts for the construction of the credit union’s new headquarters on the site of the former Viscount Bar - plans for which were first unveiled in 2013 - two years after the credit union bought the bar and demolished it.
A planning appeal to An Bórd Pleanála delayed the project by 2.5 years before the dispute with Dunnes further delayed building. The site has lain vacant and surrounded by hoarding for several years.
But Mr Kenny confirmed last night that builders will be on site within days after a €5.835m contract was awarded to Cumnor Construction following a competitive tender process.
Construction is expected to take a year to complete.
He also defended the cost and scale of the project and said it will ensure that the branch will be able to cater for growth and future development of credit union sector which has seen many mergers in recent years.
Chairman of Bishopstown Credit Union, David P Barry, welcomed the signing of the contract: “We are now re-establishing our presence in the heart of Bishopstown.
"Work will commence this month and it is intended that the building will be completed and fitted out in 12-months.
As one of the largest community-based credit unions in Ireland, with assets of €150m and a staff of 30 people, we have outgrown our current premises on the Wilton Road and our new headquarters will enable us to make further progress as a key local financial service provider.
“We are a strong and secure financial institution which has made significant investment in IT as a feature of the credit union’s success, and we now have one of the most advanced service delivery channels in the country," he added.
Founded in 1967, Bishopstown Credit Union originally operated from the crypt of Dennehy’s Cross church.
At one time, it had four branches - the headquarters it opened on Wilton Rd in 1997, the branch in Wilton Shopping Centre, as well as offices on the Curraheen Road and in Ballinhassig.
It closed the Curraheen Road and Ballinhassig branches as part of an overall cost-saving drive which achieved some €500,000 in savings.
Once the new building is ready, the credit union headquarters will relocate to Curraheen Road.
The Wilton Road premises, and the adjoining property which it also owns, will be sold - the proceeds of which will help offset the construction costs - and the Wilton Shopping Centre branch will be retained.

October 17, 2018

SANRAL Riding the Construction Boom


The South African National Roads Agency (Sanral), which has issued almost no new tenders this year, was hoping to issue several new major multibillion-rand tenders soon.

However, Sanral chief executive Skhumbuzo Macozoma, said yesterday that “the unfortunate impasse” with the National Treasury last year would affect the construction sector through an 18-month lag in construction projects.

Despite this impasse, Macozoma told the annual conference of the SA Forum of Civil Engineering Contractors (Safcec) that Sanral had awarded the two mega bridge projects on the N2 Wild Coast at a cost of more than R3 billion, while the seven packages of new road construction currently under design would soon be tendered and involved a projected further budget of about R6bn.

Macozoma said Sanral was also pushing “very hard” to secure funding for the development of the N3 section from Maritzburg to Durban at an estimated cost of about R20bn.

“It is our hope that with the help of government and industry players, we can unlock the rest of the R128bn worth of national roads projects that were earmarked for roll-out through private finance, which currently cannot move due to the anti-toll sentiment in the country,” he said.

Macozoma added the current Sanral 2018/19 medium-term expenditure framework (MTEF) non-toll budget allocation amounted to about R54bn, plus another about R15bn for the toll portfolio.

“This will go to the traditional maintenance and capital works that have been prioritised in this cycle under very difficult budget conditions.

“With such budget commitments to projects over the MTEF, we are the stimulus before the stimulus package,” he said.

Macozoma said the construction industry, while being at its lowest levels currently, was poised to pick up and restore its market status owing to projected growth of the residential, energy, transport and logistics businesses.

Construction boom

But Macozoma said that if the history of road funding was anything to go by, South Africa needed to return not to the 2010 construction boom but to the investment period of the mid-1970s to 1990s.

Macozoma attributed the impasse at National Treasury to supply chain reforms in government that sought to strengthen good governance in the procurement of infrastructure projects.

However, he said there were “serious unintended consequences” that must be addressed with the National Treasury, including project delays and cancellations, and conflict with construction general conditions of contract.

Webster Mfebe, the chief executive of Safcec, said the stimulus and recovery package recently announced by President Cyril Ramaphosa that prioritised infrastructure spending as a key driver of economic activity required a construction industry body that was ready to deliver.

But Mfebe said the lack of work was beginning to deplete the construction industry's capacity.

“If not attended to expeditiously, it will render the local industry hopeless, thereby allowing foreign contractors to dominate the construction sector.

“The rest of Africa is currently experiencing the consequences of the demise of their construction industry. This, among other things, opens a door for the economic colonisation of Africa – the new threat being the 'Chinalisation' of Africa, where government to government investments are prioritised over business to business investments. This scenario can only make foreign companies ready to deliver while the local industry will be completely decimated,” he said.

Isabella Makuta, the president of Safcec, said construction industry trading conditions had become more than dire, with the industry confronted by a litany of challenges and witnessing company closures and downsizing, including job losses at unprecedented levels.

Makutu said the likely delay in the implementation of the envisaged R400bn infrastructure programme might spell the demise of many key players in the industry.

“A jobs bloodbath will be a natural outcome of such unfortunate circumstances. This can and must be avoided,” she said.

African News Agency (ANA)

August 15, 2018

Road Tender Bribes

Israeli tycoon quizzed over Kenya roads tender bribes
A SECTION OF THE MAU-SUMMIT-KERICHO-NYAMASARIA ROAD UNDER CONSTRUCTION WHICH WAS UNDERTAKEN BY AN ISRAEL COMPANY WHOSE OFFICIALS ARE THE SUBJECT OF BRIBERY INQUIRY CLAIMS
A SECTION OF THE MAU-SUMMIT-KERICHO-NYAMASARIA ROAD UNDER CONSTRUCTION WHICH WAS UNDERTAKEN BY AN ISRAEL COMPANY WHOSE OFFICIALS ARE THE SUBJECT OF BRIBERY INQUIRY CLAIMS. FILE PHOTO | NMG  
Israeli police on Sunday questioned Israeli-American billionaire Shari Arison in connection with an ongoing bribery investigation into the country’s largest construction firm, Shikun & Binui, which is alleged to have bribed Kenyan officials to win lucrative road tenders.
In a joint statement on Sunday, the Israeli police and the Israel Securities Authority said their investigation was focusing on suspicions that the company bribed foreign government officials to advance projects worth hundreds of millions of dollars in Kenya and other countries.
Ms Arison was summoned on Sunday along with another executive of Arison Group, Efrat Peled, by the Israeli police’s anti-corruption unit, Arison Group said in a statement.
“They cooperated fully and are certain there was no flaw in their conduct, and that this will also be the conclusion of the enforcement agencies,” the firm was quoted saying by Reuters.
Investigation into the Tel Aviv-based construction group is expected to also place a section of current and former Kenyan Transport ministry officials on the spot over their involvement in suspected corruption.
Israel police on February 20, opened investigations into the activities of Shikun & Binui’s former senior managers suspected of involvement in the bribery in Kenya.
The firm works in Kenya through its subsidiary Solel Boneh International Holdings (SBI Holdings).
SBI Holdings is the company that Nairobi picked to build the World Bank-funded Mau Summit-Kericho-Kisumu Highway at a cost of Sh14 billion in 2010.
Shikun & Binui said in February that four current and former employees of a foreign subsidiary had been detained for questioning by Israeli police on suspicion of bribery in Kenya and other African nations.
SBI, which is one of the largest contraction firms in Israel, has been bidding for other lucrative construction projects in Kenya.
The probe has turned the heat on those who served at the helm of the Transport and Infrastructure ministry at the time the suspect contracts were awarded.

August 2, 2018

Infrastructure Spending - More the Delay more the Money

Picture: ISTOCK
Picture: ISTOCK
The South African National Roads Agency (Sanral), which has starved the construction sector of work for nearly a year, is finally waking up from its slumber — although analysts say it will have little room to manoeuvre for the foreseeable future.
Sanral’s rollout of contracts stalled in 2017 because of disagreements with the Treasury over processes to award consulting service tenders. That led to a major backlog of road projects and has taken its toll on the ailing construction industry.
Basil Read, which has a roads division, is one of several contractors to have succumbed to the generally anaemic state of the industry. The 66-year-old firm was forced into business rescue in June.
Sanral spokesman Vusi Mona told Business Day the roads agency "is contracting again after resolving the issue of design contracts with Treasury".
"We have now resumed the awarding of both design contracts and construction work," Mona said.
AECI CEO Mark Dytor, whose company recently bought materials supplier Much Asphalt, told Business Day last week that Sanral and other roads agencies had started appointing engineers to oversee tender evaluations.
Dytor agreed the Treasury had become more prudent in its cash disbursements and the new government was "clamping down on where the money’s going at the moment".
"But what we are seeing from the likes of Sanral is that contracts are starting to be let out, and I think that bodes well for the last quarter of the year and next year," he said.
"If the country is to grow we have to spend on infrastructure," Dytor said, adding that he expected President Cyril Ramaphosa to prioritise roads and other similar projects.
However, analysts say that while starved construction firms would pounce at tenders, they doubt whether Sanral can afford new roads.
Ample capacity
FNB senior economic analyst Jason Muscat said there was ample capacity in the industry for road projects, since large contractors, including Raubex, were largely weathering the storm.
"But government finances are really not in a position for new builds — at the moment it’s really about keeping everything bandaged up sufficiently to keep going. So I would imagine the bulk of Sanral’s spend is going to go towards maintenance rather than new infrastructure."
Muscat said the state was having to cut back on infrastructure to fund items such as free tertiary education and to provide guarantees for state-owned enterprises.
And if calls within the ANC to scrap e-tolls were taken seriously, Sanral’s woes in the debt capital markets would be compounded.
Muscat said the construction industry as a whole was in a desperate state.
The civil confidence index, which FNB compiles along with the Bureau of Economic Research, fell to 15 points in the second quarter — the fourth-lowest number in the index’s 21-year history.
The average reading over the two decades is 45 points.
The second-quarter reading shows that 85% of respondents did not have confidence in the civil construction sector, partly because competition for the few tenders in the market was becoming even fiercer, and margins were now ultra-thin at best. As many as 90% of respondents said that there was insufficient work, primarily due to the lack of state projects.
Aveng’s share price was closing in on R70 prior to the 2010 Fifa World Cup, but has plummeted to just 8c on Wednesday. Over the same period, Group Five has fallen from close to R60 to 85c and Esor from about R6 to 10c.
Those with bigger international footprints, such as WBHO, have held up better.
Muscat expects more failures in the industry, or at least some consolidation.
He cited German firm Aton’s hostile bid for Murray & Roberts, which in turn has been trying to buy out Aveng.
He said FNB was concerned that following SA’s weak growth in the first quarter and negative high-frequency data in the second quarter, the bank may have to revise its 2018 growth forecasts for the country downwards, from 1.6%.
"We’re concerned that downgrades are soon going to be in the spotlight again, and obviously that’s going to hit Sanral and Eskom bonds … and it’s going to make the cost of financing that debt almost unmanageable, so we’re really up against it at the moment."
Industry Insight economist David Metelerkamp said the release of Sanral projects would be a "good boost" for the construction industry, since road projects account for the bulk of civil construction work — as much as 55% in 2017.
"So this would be a big reprieve for some contractors — in the short run — that are absolutely dying for work."
Most contractors were operating at between 51% and 75% capacity, which meant they had "plenty of resources lying idle waiting for the next job".
However, Metelerkamp said that the country still had too many construction companies compared with other markets, so failures in the current environment were inevitable.
"And even if Sanral are to release a flurry of projects, it still won’t be a big enough reprieve for the overall sector," Metelerkamp said.