Auditor General flags E3.3bn in ICC/FISH financial irregularities

The Auditor General (AG) has uncovered financial irregularities amounting to over E3.3 billion in the International Convention Centre and Five-Star Hotel (ICC-FISH) project.

The compliance audit report for the financial years ending March 31, 2023 and 2024 revealed weaknesses in contract management, procurement processes, project supervision, and financial accountability. These failures resulted in cost escalations, project delays, unsupported expenditures, and irregular disbursements.

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The ICC-FISH project, under the Ministry of Economic Planning and Development, has already cost government over E5 billion since it began in 2014. It is expected to be completed in the current financial year and begin operations next year.

Tender irregularities

The audit exposed an improper award of tender for the Five-Star Hotel, valued at E1.41 billion. The contract was awarded to the KISS (Stefanutti/Inyatsi/Kukhanya) Joint Venture, despite evaluation reports showing that another bidder had submitted a lower, competitive price.

According to the AG, this represented a major breach of procurement regulations, casting doubt on the project’s governance.

Unsupported expenditures

The audit also flagged a provisional sum of E717.7 million for the ICC, which was not backed by adequate documentation.

“The amount is substantial and I am concerned that it could not be properly accounted for. Sufficient and appropriate evidence that details the usage of this amount has not been provided,” the AG stated.

Additionally, cost escalations raised alarm. Bulk earthworks ballooned from an initial E80.2 million to E567.1 million, while architectural design fees increased to E196.5 million without proper justification.

Other concerns

The report also highlighted:

• E111 million in interest from late payments due to poor financial management.

• E325.4 million in unsupported interim certificates, showing weak payment approval systems.

• E16.3 million in irregular procurement of project managers.

• E32.9 million in unauthorised variation orders.

• E8.3 million in unaccounted funds for piling.

• E5 million in unsupported project manager fees.

• E2.7 million in unsupported contingencies for piling.

The AG concluded that these irregularities point to systemic weaknesses in the oversight of the project. The matter is now set to be debated further in Parliament before the Public Accounts Committee (PAC).

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