A PARLIAMENTARY portfolio committee will next week launch an investigation into the cancellation of an airport construction tender by the Civil Aviation A
uthority of Zimbabwe (CAAZ).
The tender was for the construction of a runway at Victoria Falls airport and had been awarded to Zimlantic Investments. The main tender for the construction of the airport terminal was awarded to Costain Africa. Zimlantic Investments got the tender as a subcontractor.
The parliamentary portfolio committee on Transport and Communications wants to know why Zimlantic Investments’ contract was cancelled when it had already found a foreign financier for the construction of the runway.
Zimlantic Investments had agreed with South Africa’s Nedbank to fund the project but the deal collapsed after the contract was cancelled at the last minute.
CAAZ general manager, David Chaota, this week told the committee that the decision to cancel the contract was made by the board of directors.
When asked why the contract was cancelled in the first place Chaota said: “We don’t just cancel tenders for the sake of cancelling them.”
Committee chairperson, Leo Mugabe, told Chaota that the committee believed he was protecting a higher authority.
“In this age of sanctions, in a situation where our country risk is very high, it is surprising to hear that a contract which has found an external financier is cancelled,” Mugabe said.
“I think you are protecting someone here. We will have to meet you, alone next week and get to the bottom of this matter.”
A member of the committee told businessdigest that they would be launching an investigation into the issue.
“It’s clear that something is not right about the whole issue. We want to investigate to get the real issue,” said the MP. “We can’t have parastatals just canceling contracts willy-nilly when the country is already behind schedule in the preparations for the World Cup.”
The tender has since been awarded to a company called Dubai World.
The plan was to expand the Victoria Falls airport in anticipation of increased traffic during the 2010 soccer World Cup to be held in South Africa.
The portfolio committee was informed that Dubai World had engaged a South African-based engineering company to redesign the runway and reduce it from 4km to 3km. Construction work on the airport terminal building has also been stopped due to the confusion surrounding the runway’s sub-contractor and escalating costs.
When the tender was floated, the total cost of construction was $3 billion but it has since escalated to $3,1trillion plus a foreign currency component of US$4,5 million.
Costain cannot continue to build the terminal unless construction at the runway proceeds.
“The terminal building will not make money unless there is a runway which provides throughput. That is why the runway is a big issue,” said Chaota.
During the floating of the tender, CAAZ told interested bidders to submit financing proposals with their bids after the cash-strapped government failed to commit itself to funding the construction works.
The main contractor and sub-contractor submitted a build pperate transfer (BOT) financing proposal to ring fence revenues generated from the airport and recoup investment costs.
Chaota told the committee that most works would have to be redone because of the delays.
“We are in a worse off position because some works have to be redone because they were weathered as they were earthworks,” Chaota said.
Chaota said CAAZ had not been able to find off-shore funding for the construction of other airports around the country.
“We have in the past engaged a number of possible partners but when we get to the crucial stages they just disappear,” he said.
Some of the World Cup projects that have stalled include expansion of Buffalo Range Airport and the construction of a stadium in Beitbridge.