Tanzania's mega projects plethoric with fraud

DAR ES SALAAM, Tanzania

Tanzanian President Samia Hassan has ordered investigations after it emerged some Tsh414 billion (US$ 176.4) million had been irregularly paid to contractors for the standard gauge railway (SGR) mega project.

The president reacted after receiving a report of the Controller and Auditor General (CAG) for the year 2021/22 presented to her Wednesday at State House in Dar es Salaam.

In his report, the CAG Charles Kichere said that the government has been incurring losses due to unnecessary delays and failure to pay various contractors in the country on time, something he said was a violation of conditions signed in the project’s contract.

The CAG said the SGR, “the first lot of which was scheduled to be completed in November 2021 as per the contract signed, has been postponed now seven times due to such delays”.

President Hassan castigated unfaithful employees in the Ministry of Finance and their heads of division for being responsible for the delays.

However, she also ordered prompt settlement of payments to contractors for pending projects completed within the agreed timeframe.

As per the contracts, contractors are often paid within 90 days of completion.  Officers were found to have delayed the payments, which automatically attracts penalties for the government. Samia said government officials found culpable will be punished.

Turkish contractor Yapi Merkezi was in April 2017 contracted to build the first and second phases of the SGR line from Dar es Salaam to Makutupora, covering 722 kilometres.

In the previous report of June 2020, the CAG found similar fraudulent malpractices in the Ministry of Finance, with the delays on the project forcing the government to pay extra fees amounting to Tsh26 billion (US$ 11.3 million) for failure to remit the funds to the contractor on time.

The CAG further revealed that in the national development projects for the period under review, “the government paid more than Tsh2.9 billion (US$ 1.2 million) as interest after having delayed to remit money due to the contractor within the set timeframe”.

Last week, Tanzania’s Parliamentary Committee on Infrastructure urged the government not to grant any more time extension to the contractor executing phase one and two of the country’s SGR project.