Extra US$26m splashed on Trabablas raises stink

Finance Minister Mthuli Ncube was grilled by legislators over concerns of excessive expenditure on the Trabablas Interchange project in Harare, with questions raised about the total cost and sources of funding amid reports that the project's expenses may have reached as high as US$114 million.

President Emmerson Mnangagwa officially opened the Trabablas Interchange, formerly known as Mbudzi Roundabout, on May 30. Initial disclosures indicated the project was financed by an US$88 million loan from Fossil Mines (Private) Limited, supplemented by funds from the International Monetary Fund's (IMF) special drawing rights (SDRs).

The loan agreement, formalised on December 6, 2021, under the Public Debt Management Act, carried an interest rate of Libor plus 5% per annum.

During parliamentary sessions, legislators demanded clarity on the project's finances, suspecting inflated costs. Emakhandeni legislator Descent Bajila of the Citizens Coalition for Change (CCC) pressed Minister Ncube for a detailed cost breakdown and clear explanation of funding sources.

Minister Ncube confirmed the project's funding structure, stating: "The cost of Trabablas Interchange was driven by our initial loan arrangement of the order of US$88 million, provided by a consortium of contractors. We used US$26 million from the SDRs as a deposit, blending both the SDRs and the loan from contractors."

When pressed, Ncube revealed the total project cost stood at US$114 million, split between the US$88 million loan and the US$26 million from SDRs.

Chikanga legislator Prosper Mutseyami questioned why an additional US$26 million was spent when the project was originally budgeted at US$88 million. Ncube attributed the increase to "unforeseen project variations," particularly the high cost of relocating residents displaced by the infrastructure development.

"There were unexpected escalations, especially relating to the relocation of families, which pushed the budget beyond initial estimates," Ncube explained.

He elaborated that US$65 million covered core infrastructure costs such as contractor site establishment, traffic accommodation, drainage, storm drain protection, road signs, and foundational structures. The relocation expenses, however, were "quite onerous," causing the overall budget to exceed initial projections.

Ncube acknowledged that cost overruns were not planned but emerged during project implementation, especially due to resettlement negotiations.

Additional expenses included the construction of 12 bridges costing around US$16 million, supervisor engineering fees amounting to US$2.4 million, and electrical works at US$4.4 million.

Summing up these costs, Ncube stated: "Here, the US$26 million for relocation is not yet included. That sum went towards moving households situated along the project route."

Mbizo legislator Cobarn Madzivanyika challenged the minister's explanation, highlighting that the US$26 million had initially been described as a deposit but was now being referred to as a budget overrun. He questioned Ncube's authority to approve an extra US$26 million outside the parliamentary-approved loan, which was gazetted in October 2021.

Ncube responded by asserting his legal powers as Finance Minister: "I have the authority, vested by Parliament and the Executive, to authorise such expenditure without needing to return to Parliament for approval."

The exchange underscores mounting parliamentary scrutiny over the Trabablas Interchange's financial management as concerns grow over public spending transparency and accountability in major infrastructure projects.