ICC/FISH DELAYS COST TAXPAYER E10M MONTHLY

MBABANE – Delays in the ICC-FISH construction caused by budget constraints cost the taxpayer E10 million in monthly penalties.

Due to the delays caused by cash flow challenges, government is said to have lost over E40 million on delay damages or liquidated damages for the International Convention Centre and Five-Star Hotel (ICC-FISH). The construction of the ICC-FISH, which has cost around E8 billion, continues to take from the taxpayer despite government’s promise that the millennium project will be completed this year. Despite the commitment to make the ICC/FISH completion a priority, which included allocating a budget enough for the remaining work, contractors have abandoned the site from time, to time due to government’s failure to pay them on time.

Penalties

The taxpayer is now forking out around E10 million per month in penalties to the contractors on the site. This has prolonged the completion period of the project, which has been earmarked to contribute to the economy. It was gathered that altogether, the period when the contractor/s downed tools due to unpaid bills by government is more than four months, which has led the taxpayer to pay over E40 million in penalties.

These penalties are known as delay damages or liquidated damages. They are financial penalties that are usually agreed upon in the contract and are intended to compensate the project owner for losses due to the delay. In the second quarter performance report and debate for the Ministry of Economic Planning and Development, Minister Dr Thambo Gina confirmed that the ICC would be completed around April - May 2025. He said the main reason was the unavailability of funds to pay contractors.

“The main reason is the unavailability of funds to pay contractors who abandoned their work. Some left the site around May, others before and after. Even when they are not on-site, government continues to incur costs, because even if they are not on-site, the contract is still running. Roughly, when they waited for a month, the minimum charge in penalties was E10 million for affected work. The reason for the delays is the budget cash flow,” he said. “Secondly, the ICC and Five-Star Hotel, when it was built there was E260 million for interior fit-out and E250 million, which all combined was about E500 million. In 2016 the interior fit-out was changed from model to classical, thus we needed specialists in interior decor and fit-out. The moment from November 12, 2024, there were bids for the interior tender,” he said.

Around three contractors from overseas are said to have shown interest and made presentations. He said the reason they looked for a tender was that those who were there charged a lot hence the country could not accept, and then a decision to look for a cheaper contractor for the work was taken. The minister said an update will be made in due course on that exercise.
“The builders after completion will have to wait for the fit-out. There is the carpet, cladding and roofing. This means the one for the carpet has to wait for the cladding and the roofing has to wait. The main contractor has to fit the carpet and wait for the wall cladding,” he said.

As they wait for the other, they also charge the fees for waiting for delays. The public was made to believe that when the ICC/FISH is completed by December 2024, commissioning schedules would be done by July 2025, and if managed well, the project should give the country 0.25 per cent growth in the gross domestic product (GDP) in 2025, 0.75 per cent GDP growth in 2026 and 2027. Due to the delays, this might not be realised.

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