GOVERNMENT AGENCY PICKS HIGHEST BID IN MULTI-BILLION SHILLING CONTRACT, RESULTING INTO A LOSS OF MORE THAN 20BN/- TO TAXPAYERS
WHEN it comes to the government's agency responsible for the planning, construction and maintenance of the nation's roads, money is no object.
The state-run Tanzania National Roads Agency (TANROADS) under its controversial chief executive officer (CEO), Ephraim Mrema, recently signed a contract for the upgrading of the Bagamoyo-Makofia-Msata road to bitumen standard with a company that quoted one of the highest prices of the four bidders for the project.
According to documents seen by THISDAY, TANROADS awarded the tender for the 64-km road to Estim Construction Company Limited owned by Dar es Salaam-based business tycoon Subhash Patel.
Estim Construction Co. Ltd was one of the highest bidders in the tender process, offering to build the road for 105.6 billion/-.
A Chinese firm, China Henan International Cooperation Group Co. Limited (CHICO), which had the lowest bid of 84.1bn/-, was elbowed out of the tender process in the final stages under dubious circumstances.
This means that TANROADS picked a company which was 21.5bn/- more expensive than the lowest bidder.
The other short-listed bidders for the project were Sinohydro Corporation Limited (131.5bn/-) and General Nile Company for Roads and Bridges/Dott Services JV (118.9bn/-).
Well placed sources say the TANROADS Headquarters Tender Board (THQTB) was split over the matter, with some members preferring that the contract be awarded to the lowest bidder -- CHICO.
Mrema is alleged to have intervened in the tender process and ultimately awarded the contract to Estim Construction Co. Ltd.
"M/S China Henan International Cooperation Group Co. Ltd was the lowest evaluated bidder," said part of the tender board documents seen by THISDAY.
"The bidder also substantially demonstrated possession of the stipulated post-qualification requirements. The bidder was therefore recommended for award of the contract, subject to successful negotiations."
It is understood that during pre-contract negotiations, CHICO requested an additional 10 percent of the contract value for maintaining the road and strengthening of bridges.
This would have raised the contract value to around 92.4bn/-, which was still 13.2bn/- cheaper than the bid by Patel's company.
Some senior members of TANROADS tender board maintained that due to a large difference between the bid by CHICO and Estim Construction, which was picked as the next ranked bidder, the Chinese firm should be asked to withdraw its demand for a 10 percent increase.
Alternatively, board members suggested that the project should be re-tendered in the event that CHICO refused to withdraw the demand for extra payment for maintaining the road and strengthening of bridges.
"Mrema interfered in the tender process and with the support of some members of the tender board ordered that the tender be awarded to Estim Construction Company," said an official close to TANROADS.
The TANROADS CEO is no stranger to controversy. His tenure at the government agency has been the subject of much debate, with officials saying he was unlawfully appointed to the post and exceeded his term.
The Ministry of Infrastructure Development has previously reprimanded Mrema for alleged gross insubordination and unacceptable professional conduct.
The TANROADS Board of Directors has officially requested the government's intervention in the matter, but to no avail as officials say the CEO remains untouchable despite a series of serious allegations against him.