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Martin Kadzere and Bernard Yombayomba
Public contracts that have been dormant for more than two years or were only partially implemented will be re-evaluated to determine their national strategic fit as well as have their scope and price reviewed in line with a new Government policy.
The new policy is provided for in the new Public Procurement and Assets Disposals Act, which prioritises effective management of public contracts unlike the old procurement law whose provisions were limited to just awarding tenders.
According to the new provisions, where the scope of the project needs to be increased, it should not be by more than 50 percent of the original. And where the price is going to be raised, it should not exceed 20 percent of the original value, Nyasha Chizu, the chief executive of Procurement Regulatory Authority of Zimbabwe said.
Anything outside the thresholds may result in the cancellation of the project.
There are several non-performing EPC contracts awarded by the Government particularly in the energy sector. These include the $200 million Gwanda solar project awarded to Intratreck Zimbabwe and the $120 million emergency power plant in Mutare, awarded to local firm Helcraw.
“Before, what was happening was done on a case by case; people would re-price BOQs (bill of quantities),” Chuzu told Business Weekly on Wednesday.
“That process had its own weaknesses in that due diligence was a bit limited because it was a matter of pricing; there was no competition or assessing the value for money. What the Government has now introduced is the element that all public contracts that were awarded need to be reviewed in terms of strategic fit because there are some projects, which might not be necessary because of the passage of time.
“The other element is that technology is changing. So some of the specifications of the projects might no longer speak to the technology prevailing. Look at the solar power stations.
“At the time of award, the prices were higher, as technology improves the price reduces. So all these things need to be reviewed as otherwise if we just go with the project we would unnecessarily add costs to the public sector by just accepting a project because it was awarded at hundred million two years ago when costs and technology have changed. So there is now need to re-scope and review price of the project.”
There are so many companies that were awarded public contracts several years ago but failed to perform mainly due to capacity limitations and failures to mobilise funding.
Bongani Ndlovu