Why has the multibillion Gisenyi market stalled for 11 years?

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Why has the multibillion Gisenyi market stalled for 11 years?
Why has the multibillion Gisenyi market stalled for 11 years?

Africa-Press – Rwanda. Nearly two years after getting new investors to revive the project, the controversial Gisenyi market which is estimated to cost more than Rwf4 billion is still put on a halt, Doing Business has learnt.

Initially, construction of the market – which started in 2010 – was supposed to be completed in 2013 by ABBA Ltd but work stalled after District officials found that there were tender irregularities.

In January 2021, it was reported that the first phase of the project would be completed in six months, following an agreement between the District and a new investor, Rubavu Investment Company Ltd. At the time, Gilbert Habyarimana, the Mayor of Rubavu District, disclosed that under the agreement, the investor was responsible for completing construction of the facility.

Traders who are the main beneficiaries of the project have no idea what is going on.

“We waited for long but it is not clear why the market has stalled for such a long time,” said Petronille Akimanizanye, a garment vendor in Rubavu city.

“We heard that they still need to revise the cost after realizing that the cost to complete works was not well calculated by the District,” another vendor who preferred anonymity said.

Disagreement over Rwf276 million

Based on new valuations, the first phase would be completed at a financial outlay of Rwf2.7 billion. Previous construction works plus land acquisition were valued at Rwf2.18 billion, according to the new valuation.

However, according to Pierre Celestin Twagirayezu, chairperson of the Rubavu Investment Company Ltd, there is disagreement over Rwf276 million that is required in construction works.

The investor was responsible for completing construction of the facility, according to the agreement. After construction the parties would then discuss a detailed shareholding arrangement.

The construction of the market—which started in 2010—was supposed to be completed in 2013, by ABBA Ltd, but stalled following a tender dispute. The dispute triggered the cancellation of the project contract between the District and the investor.

According to available data, at least Rwf1.3 billion had been spent on the construction works by the time works on the project came to a standstill.

In 2015, Police in Rubavu District arrested seven officials of the district procurement committee over corruption in the tendering process.

The cancellation of the project forced the contractor- ABBA Ltd- to seek court redress in 2014.

Court ruled in favour of the District and handed over the project document on February 7, 2017, effectively kicking out ABBA-Ltd.

The first phase of the market could be completed at Rwf4.7 billion.

Districts officials earlier said that the second phase requires a financial outlay of Rwf8 billion, which may mean approaching other investors for equity, debt or both.

Doing Business contacted Rubavu District officials to inquire about headway in fast-tracking the construction works for the stalled market but none had responded.

Meanwhile, Jean-Chrysostome Ngabitsinze, the Minister of the Ministry of Trade and Industry, has pledged to set up a team to assess and seek a solution.

“We have set up a technical team that brings together different institutions to assess all the issues derailing the progress on the market construction. The team has to give us a report. We will hold a high-level meeting to come up with the solution within two weeks,” the Minister told Doing Business.

The market is one of projects meant to boost urbanization in the secondary city. Rehabilitation works for Rubavu District are in motion to accelerate its urbanization and development.

The move is in line with the government’s recommendation to foster rapid development and expansion for secondary cities.

Rehabilitation works for Rubavu District are in motion to accelerate its urbanization and development, in line with the government’s recommendation to foster rapid development and expansion for secondary cities. Rubavu is one of the country’s secondary cities. Others are Muhanga, Huye, Rusizi, Musanze, and Nyagatare.

Currently, an inspection for buildings that need renovation and expansion in Rubavu district is underway.

Previously, an inspection was conducted where 70 commercial buildings in the town centre were temporarily closed; to be reopened under commitments signed to get all the buildings renovated within a maximum of two years.

The stalled market project is among 22 other cases of stalled projects worth Rwf115.3 billion that resulted from inadequate contract management, according to the Auditor-General’s reports.

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