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The Special Audit Report on the Road Development Agency (RDA) for the financial year ending December 31, 2017, to 2022 has revealed severe mismanagement of road contracts and significant financial irregularities.
Among the key findings is the accrual of K1.3 billion in interest charges due to the agency’s failure to settle contractors’ and consultants’ bills during the period under review.
Acting Auditor-General, Dr Ron Mwambwa, issued the report in Lusaka on Thursday evening, produced in accordance with the provisions of Article 250 of the Constitution of Zambia (Amendment) Act No. 2 of 2016.
Mwambwa explained that the report, covering a five-year span, provided a comprehensive picture of the road projects, noting the extended nature of such projects.
The last audit covered 2011 to 2016. “As of December 31, 2022, the RDA owed various contractors and consultants amounts totaling K9,888,072,680 for road works.
This amount reduced to K9,645,456,345 by September 30, 2023, with interest charges amounting to K1,382,693,996 accrued on the outstanding amounts,” Mwambwa highlighted.
He emphasized that failing to settle these bills resulted in avoidable interest charges, diverting resources from critical sectors of the economy.
From January 1, 2017, to December 31, 2022, the RDA contracted 24 companies for 24 projects, with contract sums totaling K9,798,846,394.
Mwambwa noted these engagements violated Public Procurement Regulations as they lacked committed funds and exceeded budgeted amounts by K7,507,918,029, leading to government overcommitment.
Additionally, delays in engaging consultants, ranging from three to eight months, caused significant setbacks in project timelines due to missing essential designs, drawings, and authorizations.
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Consequently, 14 road contracts originally valued at K4,525,680,832 were varied to K6,651,797,641, incurring additional costs of K2,126,116,809.
Similarly, consultancy contracts valued at K117,510,010 were varied to K254,405,186, adding K136,895,176 to government costs.
Mwambwa also cited the agency’s failure to recover advance payments amounting to K90,950,424 from three contractors: China Civil Engineering Corporation, Inyatsi Roads Zambia Limited, and Sable Transport Limited, for specific road upgrade projects.
To address these audit findings, Mwambwa recommended that the RDA prioritise and budget projects in line with Ministry of Finance and National Planning approvals.
He stressed the importance of engaging consultants before project commencement to ensure adherence to specifications and value for money.
Mwambwa called for adherence to finance and procurement regulations to ensure accountability and proper management of government assets.
He also stated the need for improved quality assurance systems to meet contract specifications before making payments.
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