Private projects driving up costs
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Construction projects undertaken by private companies have driven up the cost of state infrastructure development, the public works and transport ministry told the National Assembly (NA) recently.
Assembly’s Third Ordinary Session that closed last week over the costing of state construction projects, which they said cost more than they should.
Some noted that officials overseeing the projects did not carry out a bidding process.
The ministry responded to the NA in letters recently, explaining that the government did not always have enough money to finance infrastructure projects, so the authorities asked private companies to put up the financing, with the government to reimburse the cost at a later date.
The investors factored in loan interest on the capital they had invested, which drove the costs higher, the ministry explained.
The ministry reiterated the need to construct such projects despite an inadequate budget in order to ease development.
“In many places, these projects are needed to alleviate poverty and to develop focal areas, helping to achieve the Millennium Development Goals. Meanwhile, the budget for the year is limited and cannot meet all the development needs,” the ministry told the National Assembly in letters.
To surmount this financial hurdle, it added, local authorities ask private companies to carry out feasibility studies, and to design and construct projects using their own money, without going through a bidding process.
However, many state projects do have financing, the ministry said, and it assured that bidding was normally conducted to secure the best option.
