Govt Revising Project Contracts Amid Kwacha Devaluation

Key speakers making presentations at review meeting Key speakers making presentations at review meeting Picture: Webinar screen

The government says it is reviewing several project contracts for a win-win situation to ensure standards and delivery are not compromised in the country.

This comes in the background of the devaluation and depreciation of the Malawi Kwacha in 2023 now hovering around 60 percent which players in the construction industry say has massively affected their projects.

For instance, chief executive officer for PBM Group Eng. Peter Matipwiri says the impact of the currency alignment requires remedies and strategies for firms to survive the economic shocks.

Quantity Surveyor Patrick Khambaza says the devaluation has negatively impacted on projects in the country as most contractors are abandoning or delivering sub-standard works.

"I must say that the devaluation has affected the construction industry in a big way. We might see poor workmanship happening in the industry because contractors may say let's finish the work using cheap materials," he says.

Meanwhile, Director of Housing in the ministry of Lands Martin Chimangeni says the review is being done by the Public Procurement and Disposal of Assets Authority (PPDA) while the National Construction Industry Council (NCIC) is applying new project management indices.

"We have noted in some instances, the government has reviewed clauses in the contracts to include prices and materials that have been affected so that the project delivery is still on target and also the contractors are not waste off," he says.

The sentiments came out Wednesday evening during a virtual meeting co-organized by the Surveyors Institute of Malawi (SIM) and Real Estate Talk Mw to navigate the impact of currency devaluation on the projects in developing and low-income countries.

It was observed that the situation has triggered price escalation which could severely affect quality and time delivery of projects works, especially in the construction sector.

The meeting attracted over 80 construction players such as project managers, consultants, architects, developers and quantity surveyors.

According to the managing partner for Real Estate Talk Mw Prince Machika, the engagement was an eye opener.

It was held under the theme 'rethinking construction amidst economic crises: the case of currency devaluation in Malawi'.

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Last modified on Friday, 01/03/2024

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