PAC STUNNED AS E2.5M PROJECT BALLOONS TO E25.9M

MBABANE -Members of the Public Accounts Committee (PAC) were stunned after learning that a government project initially budgeted at E2.5 million had ballooned to E25.9 million.

The project, intended for the rehabilitation of the National Handicraft Training Centre (NHTC) and Co-operative Development Training Centre (CODEC), saw its cost spike to E8.9 million without adequate supporting documentation. Despite these financial irregularities and the project’s defects, an additional E17 million was spent on further rehabilitation of the same buildings. This revelation raised concerns within the PAC, as the massive overspending allegedly lacked sufficient justification. In July, the  PAC accused the Ministry of Commerce, Industry and Trade of enabling a contractor that wasted millions of taxpayers’ money. The contractor in question is ZMT Construction, which was tasked with rehabilitating the NHTC and Co-operative CODEC.

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This was after the PAC noted that the ministry had failed to implement recommendations that were made by the previous committee. The recommendations were made to audit queries that were raised in the financial year ended March 31, 2017, where over E80 million of taxpayers’ money was wasted on projects that had defects and some were issued without supporting documents. There were two audit queries that irked Members of Parliament (MPs), who are members of the PAC. The first query was that of an expenditure amounting to E72 056 609.28, which was paid without supporting documents, which included a valuation of the work done.

This valuation is supposed to be signed off by the client’s (government) project manager after visiting the site and ascertaining that indeed, the work has been carried out. The second audit query was that of an audit inspection of the rehabilitation of NHTC and CODEC to the tune of E8 900 000. The Auditor General (AG),Timothy Matsebula had reported that the initial contract for the project was supposed to be E2 507 468.03, but the price ended up shooting up to E8 900 00, without being supported by a bill of quantities. Despite this increase, there were defects in the project and other irregularities, which included an unsupported increase of the contract price, uncertainty on utilisation of project funds, failure to prepare project final account, irregularities in the approval of payment and failure to rectify defects.

Noteworthy, both projects were carried out by the same engineer. Yesterday, the PAC members with the AG, Matsebula, visited CODEC to carry out inspections following the AG’s findings.The MPs were stunned to learn that there were new developments on the query where they were told that around E17 million had been spent on renovations, on top of the money spent on the first contractor. During the MPs’ visit, they wanted justification on how the project budget moved from E2.5 million to E8.9 million. They also wanted to know why the renovations had cost government around E17 million.

Moreover, the Deputy Chairperson of the PAC, Manzi Zwane, wanted to know what the ministry was doing to recover the money from the first contractor, as it was alleged that he did a shoddy job. According to Philip Makhanya, who is a senior planning officer at the Ministry of Commerce, Industry and Trade, when he came into office, there was no practical completion certificate. Makhanya acknowledged that the project was initially E2.5 million but escalated to E8.9 million. He said there were allegedly no supporting documents for the escalation in costs.

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Makhanya reported to the PAC that without the practical completion certificate, he asked the reasons behind its absence and also expected a bill of quantities. According to Makhanya, the engineers told them that they used to request price costing from the contractor, which is not the scheduled procedure.“In this part, we agree with the AG and we do not agree with how they operated. The engineer did not produce the certificate and that was a premise to say, we are not happy with the project. We then wrote to the AG and asked for assistance as we were not happy,” Makhanya said. Adding, he told the PAC that the renovations included tiling, kitchen renovations, electrical and door  repairs, among other renovations.

He explained that the renovations were undertaken following the Eswatini Higher Education Council (ESHEC) recommendations. Makhanya said the institution wanted accreditation and ESHEC came up with recommendations that they had to follow for the institution to be accredited.The senior planning officer went on to state that a new project was implemented, to address the issues that were raised by ESHEC.  “The new project was set at E31 million. The money is the whole project cost and four contractors have already been involved in the renovations.“This included the renovations, an auditorium, three classrooms, and a library. Currently nothing new has been done, only the renovations where close to E17 million has been used,” he said.

In terms of getting answers on how the money escalated from E2.5 million to E8.9 million, he said they have engaged the engineers in order to engage the contractor, but they have not received any feedback. “By engaging them, we were sort of reminding them that the matter has dragged for too long and we still do not have answers on how the costs were undertaken.
“The last engagement with the first contractor was when we were called by the PAC, and they did not give satisfactory answers. “A recommendation was issued that the ministry should investigate the matter, to see if there were no criminal elements involved.

“We also engaged the Ministry of Public Works and Transport about cost recovery,” he said.Furthermore, Makhanya assured the members that the matter will be followed up. Meanwhile, the PAC members raised concerns about the renovations that were undertaken at an alleged ballooning cost of close to E17 million, yet there is a contractor that was paid E8.9 million. The members stated that there was still a concern about how the project reached E8.9 million, allegedly without any supporting documents.It was noted that this was an exorbitant spending yet there is allegedly nothing presented, to quantify it. It was further noted that the money was too high for renovations.

Meanwhile, the Principal Secretary (PS) in the ministry, Melusi Masuku, thanked the PAC for their visit. On the other hand, the AG also thanked the PAC for the visit. The AG said there is a need for the ministry and the AG’s office to quickly engage and make assessments in this matter so that they can come up with the best solutions,  to protect taxpayers’ money.

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