Three phases of South and West Coast road development to amount to R295m   |20 September 2023

In total, a sum of R295,306,481.58 has been earmarked for the design and construction of three phases of the South and West Coast Road development project, funded by the Abu Dhabi government.

Minister for Transport, Antony Derjacques, revealed the project cost yesterday during a National Assembly sitting.

It was leader of the opposition in the National Assembly, Sebastien Pillay, who raised a Private Notice Question (PNQ) to acquire information regarding the financial aspects of the project, including its inaugural phase, and whether the funds have been deposited into the government's accounts.

This project will see the construction of approximately 17 kilometres of brand-new road infrastructure, extending from Anse Boileau, through Baie Lazare to Takamaka, and Anse Royale. The project plan also makes provisions for pavements, bridges, drainage systems, and lighting.

Minister Derjacques clarified that the project's financial backing is provided by the Abu Dhabi government through the Abu Dhabi Fund for Development.

The project is structured into four phases, with the first phase already under way, and currently at approximately 65 percent complete. The subsequent phases are presently in the design phase, pending approval from the Planning Authority before commencing.

As per the minister, the budget allocation for the first phase stands at R38,924,318. The second phase, entrusted to United Concrete Products Seychelles (UCPS) carries a budget of R138,821,848, exclusive of Value Added Tax (VAT).

In addition to the first phase, Benoiton Construction was awarded the contract for phases three and four, following a selective bidding process, Minister Derjacques said.  The two phases are expected to amount to R156,484,633, excluding VAT.

“With the construction of the first phase spanning from Anse à la Mouche to Baie Lazare, the donors were impressed with the government's dedication. Consequently, we were able to negotiate an extra US $20 million, equivalent to R295,000,000, for the second, third, and fourth phases of the project,” Minister Derjacques noted.

The contractors were awarded following a selective bidding process overseen by a team comprising representatives from Abu Dhabi, the Ministry of Transport, and GIBB consultants. Seven companies were invited to participate, but only four submitted bids, including Ascent Project, Mahé and Build Design, Benoiton Construction, and UCPS.

Regarding the terms of the agreement, Minister Derjacques explained that the Abu Dhabi government negotiated a tax exemption with the government, who is assuming a 15 percent VAT contribution. The responsibility for overseeing this VAT component falls under the purview of the Finance Ministry, with the funds ultimately returning to the ministry.

The VAT-related expenses for the first phase amount to a total of R5,838,647.70, while for phases two, three, and four, the government's VAT responsibility totals R44,295,972.24. These VAT payments are paid through the Consolidated Fund, in accordance with established tax procedures, Minister Derjacques added.

Furthermore, the VAT component is directly remitted to the contractor, and the Seychelles Revenue Commission (SRC) is promptly notified to facilitate the reconciliation process, in accordance with established procedures.

The project is under the supervision of the department of Land Transport, with the second, third, and fourth phases to be overseen by the consultant GIBB (Seychelles) Ltd.

Evaluations and measurements of the project's progress are conducted in close collaboration with the department and the Seychelles Land Transport Authority (SLTA), and a quantity surveyor designated by the Abu Dhabi Fund, before any disbursements are authorised.

Secretary of State for finance, Patrick Payet, noted that the agreement terms ensure transparency and accountability in the allocation of funds. These procedures align with the Public Finance Management Act and Regulations, with record-keeping overseen by the Ministry of Finance.

A similar agreement with the Chinese government was established for the construction of SBC House, SS Payet remarked.  

Principal secretary for Transport, Patrick Andre, emphasised that the funds for the project are held overseas, and payments are only transferred to contractors upon the completion of evaluations, ensuring that the work meets the specified criteria.

Significantly, the funds for this project have been held by the Abu Dhabi Fund for Development for a twelve-year duration.

Minister Derjacques outlined the payments made thus far include an advance payment of R3,857,429.80, a first interim payment of R3, 943,923.24, and second interim payment to the sum of R4, 115,116.17. The third and fourth interim payments remain pending due to the need for rectifications, a common occurrence in large-scale projects.

Furthermore, phases two, three, and four have received payments solely for the acquisition of laboratory equipment and infrastructure, totalling R1,893,025. No other payments have been disbursed for these phases thus far.

Beyond the scope of the project and its tax contributions, Seychelles will also benefit from efforts for several SLTA technicians to undergo training through the project's laboratory facility.

“This road development project promises substantial enhancements to transportation infrastructure, benefitting over 50,000 individuals who rely on these roads for various purposes,” Minister Derjacques said.

“It aims to provide resurfaced roads, expanded lanes, improved pavements, and enhanced lighting, thereby elevating the overall quality of life for residents who depend on these routes for school commutes, healthcare access, leisure activities, and shopping,” Minister Derjacques added.

Hon. Pillay highlighted that the government's actions appeared to be in contravention of the provisions of the Public Finance Management Act and taxation legislation. He suggested the presence of corruption and alleged that certain individuals might be benefiting from the funds.

Additionally, he sought clarifications regarding why the funds in question was not accounted for in the national budget, as is typically done with other grants. He further questioned the absence of oversight bodies during the selective bidding process.

Hon. Wallace Cosgrow of United Seychelles (US) echoed similar sentiments, and expressed concerns about the processes.

Laura Pillay