Zimbabwe losing billions in inflated infrastructure project costs

Zimbabwe may be losing billions of dollars in inflated costs for its massive infrastructure projects due to the absence of advanced software for accurate project pricing, according to a local industry expert. Caleb Dengu, managing director of Green Hybrid Power, raised the issue during the African Investment Forum Market Days held in Morocco this week.

Dengu highlighted that many road construction projects in Zimbabwe, such as the Harare-Beitbridge and Harare-Chirundu highways, are priced significantly higher than necessary. Costs for these roads exceed US$1 million per kilometre, reaching as much as US$2 million in some cases, which he attributes to inefficiencies and deliberate overpricing by contractors.

"The main problem is that we do not have software to properly price projects," Dengu said. "For example, most of these tarred roads should not cost more than US$1 million per kilometre. However, the Harare-Chirundu Road was quoted at US$550 million to US$570 million, which is almost US$2 million per kilometre. Proper software would calculate the required materials and other costs more accurately."

Dengu pointed to the Harare-Chinhoyi Road as a case study, asserting that its 124-kilometre stretch should not have exceeded US$1 million per kilometre with modern pricing tools. He emphasized that some contractors deliberately inflate prices to ensure profits, while others suffer from a lack of transparency and competence.

"Sometimes, it's outright corruption," he said. "Most contractors who are contracted by the government do not like transparency. When proper costing tools are applied, the prices should align with market realities."

The Ministry of Finance briefly halted payments to contractors last year, citing inflated prices as a factor undermining the stability of the Zimbabwe dollar. While efforts were made to review invoices and negotiate fair pricing, the current status of these reviews remains unclear.

In recent months, many firms involved in infrastructure rehabilitation have faced financial challenges, with some fleets grounded due to a lack of funds. Experts warn that overpricing in projects financed by Zimbabwe's limited resources exacerbates the economic strain, delaying national development.

Dengu advocated for the deployment of advanced software to enhance transparency and accountability. He explained that such tools would provide precise cost simulations based on variables like materials and soil type, reducing the likelihood of overpricing.

President Emmerson Mnangagwa's former adviser, Eddie Cross, echoed similar sentiments at the conference, criticizing the awarding of contracts to firms without adequate resources. Cross called on financial institutions to ensure proper funding mechanisms for large-scale projects to avoid mismanagement and resource leakages.

Zimbabwe's Auditor-General has consistently highlighted financial irregularities in government projects, reinforcing concerns about corruption and inefficiencies in public infrastructure development.

As the government pushes forward with its ambitious infrastructure revamp, experts stress the urgency of adopting modern project management tools and fostering transparency to ensure that public resources are used effectively and efficiently.