GOVERNMENT has suspended all road projects in Midlands Province pending investigations into a suspected over-pricing racket that is bleeding Treasury.
There are over seven projects in the province which have been put on hold and these include the US$7 million dualisation of Boterekwa Escapement Road in Shurugwi and Mberengwa Centre-Mataga Road among other road rehabilitation projects.
Government’s value-for-money investigation on all payments to suppliers and contractors to ministries, departments and agencies has exposed a massive overpricing scam by unscrupulous service providers some of whom pegged their prices based on speculative market exchange rates as high as $2 000 to the United States dollar.
The obscene forward pricing of goods and services rendered to ministries, departments and agencies as well as parastatals and local authorities has been blamed for fuelling wild parallel market exchange rates and subsequent price escalation.
With Government being the major buyer, the move prompted the recent suspension of payments to some supplier contracts, which are now subject to a value-for-money audit review before the payments are made, as a corrective measure.
Treasury has said the pricing models adopted by contractors and suppliers leaned on ridiculous extortionist behaviour and are not anchored on economic fundamentals.
In September, it emerged that the Parliament of Zimbabwe was billed US$10 000 per laptop, which is way above general market prices for high-specification laptops, while a 2kg pack of chicken was claimed to be worth US$30 against market prices of a maximum of US$6.
To that end, the Ministry of Finance and Economic Development last month instituted a “value-for-money process” for all payments to suppliers and contractors to Central Government, departments and agencies.
In August, President Mnangagwa said accounting officers who fail to detect pricing malpractices will be deemed criminally negligent and held personally liable in terms of the Public Finance Management Act, while suppliers who generate invoices based on black market exchange rates will be banned.
In an interview yesterday, Midlands provincial roads engineer Denis Mupfurira said that there was no construction project taking place in the province due to the ongoing investigations.
“The Government has suspended all road projects in the Midlands as it embarks on value-for-money investigations aimed at fighting the pricing racket that is bleeding the economy,” he said.
Eng Mupfurira said as part of the value-for-money investigations, all road projects or tenders are being revalued amid revelations that nearly all of the tenders in the province were being inflated.
He said there is a tendency of overpricing and use of black market rates in charging for materials in most of the tenders being awarded to contractors in the province.
“So, generally, we have the US$7 million Boterekwa Road dualisation, the Mberengwa Centre-Mataga Road construction among others that have been suspended pending the value for money investigations. All projects running will have to be reviewed because there was generally overpricing being done and this is not good for the economy,” he said.
Eng Mupfurira said work on the projects will resume once investigations are completed and the issue of overpricing is addressed.
“We are not saying all projects or tenders were being inflated, but most of them and soon we will able to know which ones will proceed and which ones will need retendering after the investigations by the Government,” he said.
Eng Mupfurira said the discrepancies in the tendering processes and overpricing have affected set targets.
Chief Banga of Shurugwi said the dualisation of Boterekwa Road is critical in terms of boosting the local economy.
The road is used by commercial trucks to ferry goods from South Africa up to the Democratic Republic of Congo.
“The dualisation of the road is also aimed at eliminating recurrent accidents due to its narrowness. Sadly, we have to wait a bit longer until the Government rein in these unscrupulous contractors,” said Chief Banga. – The Chronicle
