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CAG: TPA loses USD1m in radio data terminal purchases

1st May 2012
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New radio data terminals which were bought by the Tanzania Ports Authority TPA in 2010 could not function without access points causing a total loss of over USD1m, the Controller and Auditor General report for the year 2011 has said.

The report said weak management of contract at Dar es Salaam Port made Tanzania Ports Authority to enter into contract with M/s Singapore PTE Limited to supply and install radio data terminals in February 2010 at an agreed sum of USD339,000.

Immediately after the authority received the radio terminals, a series of events emerged, the report said. First, the management discovered that the supplied radio data terminals could not function without access points, it said.

This prompted the authority to sign another contract to procure the devices from M/s Singapore PTE Limited on June 21, 2010 for 68 access points at the cost of USD399, 000 on a single source basis, the report noted.

After purchasing the access points it was also discovered that the access points could not be installed on a standing tower.

According to the report, the authority therefore, contracted M/s Carts (T) Limited on September 17, 2010 to supply the standing tower at a contract sum of USD133, 000 under a single source method of procurement.

Furthermore, it noted that even after the installation of the access points, the radio data terminals could not work as the access points were required to be connected to the fiber optic system, the CAG said in the report.

This prompted the authority to enter again into a single source procurement method for extension of fiber optic cable connectivity at the cost of USD553,000 with M/s EMEC.

In total the authority incurred the extra cost from the original contract price amounting to USD1.09m and still the objective was not achieved at the time of audit as the contractor M/s Cats did not manage to deliver the access points at the agreed time.

No liquidated damages were charged as required by the contract agreement, the report said, adding that the above scenario shows that the authority did not adhere to the laid down legal requirement.

Under Sec 46 (5) of the Public Procurement Regulations of 2005 it is stated that the procuring entity must forecast its requirements for goods, services and works as accurately as is practicable with particular reference to activities already programmed in its annual work plan and included in its annual estimates.

SOURCE: THE GUARDIAN
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