Let's do the maths.
A county project is awarded for 100m.
VAT is 16%
Money going into the actual project is 84m? Wait!
The winner of contract most likely pays 10% of the original 100m to be awarded the contract. That is 10m
project money reduces to 74m.
A county project is awarded for 100m.
VAT is 16%
Money going into the actual project is 84m? Wait!
The winner of contract most likely pays 10% of the original 100m to be awarded the contract. That is 10m
project money reduces to 74m.
Because of pending bill problems & also greed, the winner of the contract plans for at least 20% mark up - of the original amount. That is 20m target.
74m less 20m is 54m.
Work that was supposed to be done for 100m is now going to be done using 54m?
Oh wait!
74m less 20m is 54m.
Work that was supposed to be done for 100m is now going to be done using 54m?
Oh wait!
An engineer has to certify that the 54m work is worth in fact worth 100m. Eats 10% of the 54m or no certification. Remember the work is only worth 50m. The guy who is supposed to release the 💰wants his/her share.
In summary, most county projects/assets are worth max 50% of their book value (value recorded in their books). Assume 30% of the 300b annual allocation to counties is used for development. That is 90b. 50% of that is 45b that is not reflected in the projects.
Same happens re the national government projects. Meaning of the 500b or so that goes into national govt dev budget, only around 250b of it ends up as national assets. That is why we are spending a lot of money on devt but the assets on the ground are mediocre. No value for money
We need to stop this madness and come up with a comprehensive framework to deal with this waste. What this means is we are developing at half the pace we should be developing. We are not getting value for our money. We need a solution for this problem!
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