80bn/- contract hangs in balance By ThisDay Reporter 22nd June 2010 GOVERNMENT OFFICIALS ACCUSED OF DELIBERATELY STALLING MAJOR ROAD CONSTRUCTION PROJECT IN FAVOUR OF KICKBACKS THISDAY REPORTER Dar es Salaam A key infrastructure project worth more than 80 billion/-, which involves construction of the Bagamoyo-Msata Road, has resulted in a massive waste of public funds with some government officials accused of deliberately delaying the contract, it has been revealed. Government officials in the Tanzania National Roads Agency (TANROADS) have so far squandered more than 12 billion/- on the project, without an inch of the 64-kilometre road being constructed. This comes after a Korean company, TAKOPA Construction Limited, received part payment for the contract after winning the tender in 2008, but was later sacked by the government for allegedly failing to deliver. The government says the much-awaited project, which will link the historical Bagamoyo town to the Dar es Salaam-Tanga highway, will now have to start from scratch. Insiders say construction costs for the project are likely to escalate by up to 50 percent of the initial estimate. A new fast-tracked tender for the project announced by TANROADS in March this year remains shrouded in mystery. "The Bagamoyo-Msata Road project has already caused a massive waste of money. The new tender is now being delayed by senior TANROADS officials to ensure that a well-connected local construction company is given this contract at inflated costs," said a government official. Sources at the Ministry of Infrastructure Development said some senior TANROADS officials are alleged to be deliberately stalling implementation the project to ensure the contract is awarded to a dubious construction company. "A construction company owned by a well-known business tycoon based in Dar es Salaam is lobbying for this project and this is the reason behind the unnecessary delay in the awarding of the contract," said a government official. TANROADS officials are always causing problems. They are delaying the announcement of the successful bidder for this project so the tender process is disrupted and this tycoon's company is eventually given this lucrative deal." TANROADS' management under its controversial chief executive officer, Ephraim Mrema, has long been hounded by allegations of corruption and financial irregularities. Both Mrema and the TANROADS Director of Procurement, Eng. Kirenga, were not immediately available for comment on delays in the Bagamoyo-Msata Road project. "Some senior TANROADS officials clearly have a special interest in this project," said another government source. In mid 2008, TANROADS issued a public tender notice for the construction of the road to bitumen standard. The tender was awarded to the Korean company, TAKOPA, which signed a contract on November 18, 2008. A year later, the company was sacked by the government after having already received a down-payment of more than 12bn/- for the project. There is still much controversy on Mrema's current position as CEO of the state-run roads agency. Following are some of the key issues surrounding the outgoing TANROADS boss as outlined by workers of the agency in a letter to State House seen by THISDAY: Mrema lacks specific qualifications outlined by TANROADS for it's CEO, which include a post-graduate degree in civil engineering, transport economics, or highway engineering, a minimum 20 years experience in road sector operations and 10 years in senior management levels, hence his appointment was unlawful. He was employed on a three-year contract in June 2007, which expired on June 3, 2010, but is still clinging onto his job to date under dubious circumstances. He is accused of gross insubordination against the Ministry of Infrastructure Development, but both the ministry and TANROADS' Board of Directors have so far failed to take any action against him. He claimed that his alleged insubordination and unprofessional conduct was sanctioned by President Jakaya Kikwete himself. State House has since refuted these claims. He is alleged to have occasioned losses of up to 300 billion/- to the government by signing contracts with construction companies under controversial circumstances. He faces corruption allegations and is the subject of an ongoing graft investigation by the Prevention and Combating of Corruption Bureau (PCCB). The state-run Public Procurement Regulatory Authority (PPRA) and Public Procurement Appeals Authority (PPAA) have accused him of "ignoring advice and lawful directives" on awarding road construction contracts. The government is yet to implement recommendations for disciplinary action against him. TANROADS Board of Directors has urged Prime Minister Mizengo Pinda to urgently intervene in the "grave" situation at the agency caused by Mrema's "reign of terror." No action is yet to be taken by the PM's office thus far.