CAG Highlights Critical Lapses in Tanzania’s Infrastructure Sector

The CAG’s recent audit of Tanzania’s infrastructure sector revealed major financial and operational flaws, including fraudulent contracts, project delays, and budget shortfalls. Significant issues were noted in road projects, weighbridge operations, and housing initiatives. The report calls for improved oversight, better funding management, and urgent reforms to protect public funds and enhance infrastructure services.

The Controller and Auditor General (CAG) has identified critical lapses in Tanzania’s infrastructure sector through a recent audit, revealing significant financial and operational deficiencies in road projects. These include extensive losses incurred from fraudulent contract activities, increased project costs due to delays in funding, and elevated risks of road damage associated with ineffective weighbridge operations. These findings are documented in the Annual General Report on the audit of the central government for the fiscal year 2023/2024, focusing on key agencies under the Ministry of Works, such as Tanroads, TBA, and Temesa.

The audit reveals troubling losses in the Ibanda-Kiwira Port trunk road project, noting that a Sh38.36 billion contract was terminated after the contractor was discovered to have submitted forged documents. Despite receiving an advance payment of Sh3.72 billion, only 2.27 percent of the project had been completed by April 2024. Tanroads is pursuing the recovery of Sh13.72 billion, but recovery is complicated by the Azerbaijani bank’s receivership that issued the guarantees. Consequently, the CAG has recommended a thorough revision of Tanroads’ due diligence practices to mitigate future risks.

In another instance, delays in government funding disbursement have escalated the cost of the Ruangwa–Nanganga Road project, increasing its value from Sh50.34 billion to Sh52.13 billion. The contractor’s claim for Sh1.79 billion has gone unchallenged by Tanroads, highlighting preventable losses linked to inadequate planning and punctual payments.

The audit also addresses issues regarding weighbridge functionality, with over 26,000 vehicles evading these checks due to breakdowns and power outages. Notably, lapses occurred at various locations, including 22,928 vehicles at Mtukula. The CAG emphasizes that these failures increase road damage risks from overloaded vehicles, advocating for enhanced maintenance and the establishment of reliable backup systems.

Additionally, weaknesses in the Special Load Permit System led to duplicate verifications, potentially resulting in a revenue loss of Sh41.18 million. The audit indicates a need for system enhancements, including real-time monitoring to curb misuse. Tanroads also faces complications with IT service providers regarding access to crucial weighbridge data, affecting overload control enforcement since January 2024.

Tanroads is grappling with a budget shortfall exceeding Sh1 trillion for 2023/24, receiving only 52 percent of its necessary maintenance budget. The limited release of Sh280.47 billion from a budgeted Sh534.66 billion has led to the suspension and stalling of projects valuing Sh495.24 billion, with interest on unpaid contractor claims increasing significantly. To prevent further liability accumulation, the CAG advises against initiating new projects until funding for existing ventures is secured and completed.

While only 48 percent of the allocated Sh22.18 billion for supervision was disbursed, deficiencies in oversight remain a concern for 44 road maintenance contracts. The resulting neglect has led to unresolved infrastructure issues, such as potholes and drainage failures, incurring additional long-term repair costs. Furthermore, a Sh1.3 billion road doctor survey van was underutilized, evaluating just one of eight planned road sections due to budget restrictions, risking future maintenance planning failures.

Despite increased fuel levy revenues, the road maintenance budget has stagnated at Sh856.79 billion since the 2021/22 fiscal year, with only 47 percent of the released funding in 2023/24. This has culminated in a substantial funding gap of Sh1.43 trillion. The CAG urges the Ministry of Finance and the Road Fund Board to seek alternative revenue avenues for bridging this widening deficit.

At the Bunju Housing Project, 39 public servants have defaulted on payments totaling Sh3.98 billion, but TBA has not enforced penalties or recovered debt, despite the urgency. Furthermore, only three evictions were executed, leading to inadequate debt recovery. A similar pattern emerges from the Magomeni Housing Project, where only a fraction of residents formalized purchase agreements due to affordability issues, stalling the cost recovery from a Sh50.19 billion investment.

Finally, the CAG has noted serious safety concerns in Temesa’s operations, with 32 vessels lacking valid Certificates of seaworthiness due to legal ambiguities regarding insurance. Although government vessels are exempt, the demand for insurance from Tasac hinders essential certification. Additionally, a new ferry project for the Mafia–Nyamisati route is 14 months behind schedule, suffering from poor contractor performance and logistical obstacles. The CAG’s report underscores the imperative for systemic reforms to safeguard public funds, enhance service delivery, and ensure sustainable infrastructure investments in Tanzania.

In conclusion, the audit conducted by the Controller and Auditor General reveals critical deficiencies in Tanzania’s infrastructure sector, emphasizing the need for immediate reforms. Key findings include substantial financial mismanagement, project delays, ineffective weighbridge operations, and significant budget shortfalls. The CAG calls for strategic improvements in due diligence processes, timely funding disbursements, and enhanced system monitoring to protect public resources and ensure the successful execution of infrastructure initiatives. Addressing these challenges is essential for safeguarding taxpayer interests and promoting sustainable development within the nation.

Original Source: www.thecitizen.co.tz