Contractors Suspends Road Work For An Indefinite Period
In January 2018 the Zimbabwean Government embarked on a multi million dollar project to modernize Zimbabwe. However the project suffered massive delays as some contractors failed to meet deadlines. The project took a new twist due to the current hardships in the country’s economy contractors have suspended the project.
Harare City Council had contracted companies to carry out road maintenance projects under the Emergency Road Rehabilitation Programme (ERRP). Companies like Bitumen World had been tasked to reclaim, spray, chip and overlay a total of 18,1 kilometers of road at a cost of $3,9 million.
While Fossil Construction had been assigned to rehabilitate 8,4 kilometers at $1,5 million cost. Tencraft Construction was apportioned 13,1 kilometers which will cost $2,1 million to rehabilitate.
Tarcon Construction was to attend to 4.8 kilometers worth $864 000 and Truck and Construction was to spruce up to 3,9 kilometers for $1,1 million. These contractors have suspended works citing the unavailability of bitumen and high price of stone.
In early September 2018 the Zimbabwean Government was set to construct and upgrade at least 2 000 kilometers of road. This was scheduled to take at least two months.
The ERRP project had created a lot of jobs as the city council has engaged local companies to supply materials as well as work on road construction.
Other companies did not have the capacity to carry out the job even before the economic crisis. They did not have the capability to construct standard roads as their equipment’s are substandard.
Companies like Bitumen World and Tencraft have written to council informing it of the development. Most roads in Harare are in the worst conditions, in some locations there are no roads to talk of.
Bitumen World said,
Due to the uncertain economic and financial conditions prevailing in the country, Bitumen World was to suspend works involving bitumen and crushed stones until the situation becomes clearer.
“Concern was raised over the slow pace of processing Interim Payment Certificate (IPC) and the problems of effecting payment of approved IPCs.”
Tencraft wrote to council saying they could only proceed with works if the costs were adjusted given the prevailing economic situation. Their letter read,
we are advising you that with effect from 1 October 2018, there has been a very significant increase in the cost of inputs due to the volatility triggered by the recent monetary policy. Major increases have been seen in imported materials like bitumen products, spare parts, oils and paints.
“Unfortunately, the import costs increases have resulted in increases of key supplies to surfacing works like aggregates. The increase will substantially increase the cost of the rehabilitation programme. We believe that the rates used in the addendum of September 2017 are no longer sustainable and should be adjusted to reflect the current scenario.”
The company said due to the price increases, suppliers were now issuing proforma invoices valid for 24 hours such that the rates would have to be adjusted almost daily.
Tencraft said it can proceed with works on the understanding that daily prices are variable and variation in costs will be paid in the subsequent IPCs under escalation of prices.
Harare Mayor Councillor Herbert Gomba confirmed the development.
It’s sad that the contractors have suspended works due to the volatility in the financial market, they wrote to us saying the costs of materials used in road making are increasing and affecting their ability to provide us with service.