Construction of the multi-billion Pula Kazungula Bridge is only likely to begin towards the end of the year after Japanese financiers pulled out of the project over a tender valuation dispute.
Funded by loans from the African Development Bank, the Japan International Cooperation Agency (JICA) as well as contributions from both the governments of Zambia and Botswana, the project’s ground breaking was initially scheduled for last month.
Information obtained by the BusinessWeek shows that before a tender could be awarded, a dispute arose early this year over the technical evaluation of bids from three shortlisted firms. The firms included a joint venture between Japan’s Shimizu and South African Stefanutti, South Korea’s Daewoo and China Major Bridge Corporation.
“The delays in the construction of the Kazungula Bridge Project was mainly due to the Japan International Cooperation Agency (JICA), the financier of the Project disagreeing to the Technical Evaluation of the three bids which were submitted for the bridge, requesting for a re-evaluation.
“In April 2014, Ministers of Transport of the two member states met with the Japanese delegation in Kasane to discuss the issues surrounding the tender evaluation. Following the meeting, the member states agreed to award the contract without the support of JICA,” said Transport Hub Coordinator Goitsemang Morekisi.
The bridge construction project including the one stop border posts as well as relocation of villagers on the Zambian side is expected to take four years at a cost of $259 million (P2.3 billion). According to Morekisi, the two governments have since decided to award the tender for the construction of the bridge to Daewoo, while other components of the project which include the building of two one stop border posts are still to be awarded. JICA was supposed to have invested over $110 million into the whole project but efforts by BusinessWeek to establish the bridge component funding were unsuccessful.
With the disagreement confined to the bids for the bridge component only, Morekisi said that JICA is still expected to fund other components of the project.
The surprise pulling of the Japanese agency, which has been involved with the project from conception, has left the government of Botswana and Zambia with a funding gap on the project.
“An award of the contract for package 1, which refers to the bridge only, was made to Daewoo E&C at the sum of $ 162 million (P1.4 billion) on the 26th July 2014,” she said.
A meeting between Zambia and Botswana officials and Daewoo representatives in Livingstone, Zambia is now slated for August 11, where details on the scope of works, procurement rules and contract terms are expected to be thrashed out.
If negotiations with Daewoo are successful, the issue will be referred back to political leaders with the contract mostly likely to be signed by September or October. Speaking after a tour of the bridge site recently, African Development Bank President Donald Kaberuka expressed concern over the huge economic cost to the Southern African Development Community (SADC) region caused by delays in constructing the Bridge.
During his visit to the project on July 26, 2014 Kaberuka saw first-hand, a long queue of trucks waiting to cross from both sides of the border at Kazungula. Transporters are using old ferries (pontoons) to move goods and vehicles across the Zambezi River at the Kazungula border crossing between Botswana, Namibia, Zambia and Zimbabwe.
“Kazungula Bridge Project is the most important undertaking that the Bank is currently financing on the continent,” Kaberuka said, adding: “It is unacceptable to have about 100 trucks on either side of the Zambezi River taking up to two weeks at the border posts before crossing.” He stressed the need to accelerate the resolution of any pending procurement and administrative issues delaying the start of bridge construction.
On average, 70 trucks cross with the ferry (pontoon) per day. The AfDB President also visited the Lumbo village-housing scheme on the Zambian side where the affected families will be resettled in the newly built permanent houses as compensation.
Source: Tender dispute stalls Kazungula Bridge, Mmegi Online (08/08/14)