Contract projects: breeding ground for corruption [Archives:2006/916/Business & Economy]

January 30 2006

Mahyoub Al-Kamali
Contract projects and their implementation by entrepreneurs are considered breeding grounds for corruption, wherein middlemen and beneficiaries of contract deals are very active. Additionally, project-allocated land plot disputes are increasing and negatively affecting society and arousing uncertainty among investors due to using weapons to settle these disputes.

Most contracts and tenders are service, development and other projects forming the core of infrastructure. Delay of their execution by contractors, consequently halting construction, under various pretexts such as construction materials price changes, requires compensation at the state budget's expense. Additionally, some entrepreneurs implement projects under specifications lower and less that what was agreed in contracts, causing much squander of funds allotted for implementing projects.

The government recently has become aware of this problem hampering project implementation timetables. Sana'a mayor Ahmed Mohammed Al-Kuhlani emphasized that companies acting fraudulently and not committed to project execution will be blacklisted and not given the opportunity to implement future projects.

At a Jan. 26 plenary meeting at the capital secretariat's public works office to discuss progress and execution levels of projects currently under construction and some floundering projects, Al-Kuhlani stressed that it is important for engineers and executive officials to shoulder their responsibilities through field follow-up of implemented projects. He added that they must take legal measures against any company breaching the contract and its terms, calling for no delays in paying financial dues to companies and contract agencies.

The meeting also discussed topics pertaining to progress in implementing projects, as well as problems and hindrances affecting normal execution, such as absent supervising engineers from implementing firms at most project sites, equipment shortages and some firms' not presenting implementation timetables.

Attendees concluded that projects' main hindrances are unjustifiable halting of work, inadequate implementation and contract firms' failure to affix traffic safety marks during the project.

The matter of implemented capital projects faltering is applicable to other projects under construction in the free zone. This situation negatively affects the investment process, slows the country's growth progress and impedes ability to attract local and foreign capital for project management in an investment environment where there is a delay in projects designed to serve investors.

Regarding the second impediment, judiciary absence in settling land plot disputes also affects the investment situation. Disputing parties mostly resort to using arms to settle problems, which worries investors. One such problem occurred in Taiz governorate.

Assistant governorate deputy Mohammed Ahmed Al-Ansi addressed a letter to the Taiz works director demanding that he and the Rahda works director quickly investigate Khadir district, which he accused of conniving with owners of previously built estates and empty land in the town of Rahda. The letter stated that real estate owners had not obtained licenses beforehand and not paid duties calculated according to areas of buildings to be built. According to the letter, there were more than 48 violations against the Rahda works office. Al-Ansi demanded the Rahda works office quickly form a committee of specialists to go to the town to carry out legal procedures and take punitive measures against the office director in the light of investigation results.

Such violations occurred in a small town like Rahda, whereas many more occur in land disputes in Aden, Hudeida, Sana'a, Mukalla and other places, which worry authorities and investors alike. Judiciary absence is the first cause aggravating these problems. This situation dictates judiciary system reform and solving disputes in a fair manner to create a stable investment climate in the country.