Rédaction Africa Links 24 with Times News
Published on 2024-03-20 09:49:50
The Minister of Transport and Public Works, Jacob Hara, has recently revealed that the Public Procurement and Disposal of Assets Authority (PPDA) has approved price adjustments for several road projects in Malawi. These adjustments were necessary due to the 44 percent devaluation of the Kwacha in November of the previous year.
Hara informed Parliament that the approved price adjustments by the PPDA amounted to a total of K315 billion for some locally funded projects. The current financial year’s development budget includes an allocation of K295 billion for 198 government-funded road projects. However, contractors working on these projects raised concerns about the increased prices of materials following the Kwacha devaluation, leading to work suspensions.
The fixed contracts did not have price adjustment clauses, making it challenging for contractors to continue work under the existing terms. Hara emphasized the importance of reconsidering the contracts in light of the current situation to ensure the quality of the roads. He stated that without the contract price adjustments, the projects would risk being substandard.
PPDA Director-General, Edington Chilapondwa, confirmed that the agency had received requests from the Roads Authority (RA) to approve contract price adjustments for various projects. Chilapondwa mentioned that most of the requests had been approved, with a few projects still undergoing analysis.
One of the stalled projects that required a price adjustment was the Kenyatta six-lane road expansion project in Lilongwe. Earlier in the year, contractors had expressed concerns about the rising prices of construction materials due to the currency devaluation. RA organized a roundtable discussion with the contractors to address the issue and find a way forward.
During the meeting, Engineer Rocky Kaunda, speaking on behalf of his fellow contractors, highlighted the challenges they faced due to the economic harshness caused by price changes following the devaluation. Kaunda stressed the importance of adjusting the contract prices agreed upon in 2021 to reflect the current economic conditions. He warned that failure to agree on price adjustments would potentially lead to contract terminations.
The approval of price adjustments by the PPDA for road projects in Malawi reflects a proactive approach to addressing the challenges faced by contractors in delivering quality infrastructure. It also underscores the importance of adapting contracts to changing economic conditions to ensure the successful completion of projects.
Read the original article on The Times
