THE Controller and Auditor General (CAG) has revealed that the Tanzania National Roads Agency (TANROADS) overpaid a contractor by a total of 586.43m/- in two major infrastructure projects, raising concerns over financial oversight and contract compliance.

According to the CAG’s audit report for the financial year 2023/24, TANROADS paid a total of 3.89bn/- to M/S China Civil Engineering Construction Company (CCECC) on August 1, 2023. The payment was made under Interim Payment Certificate (IPC) No. 1 as part of the Tanzania Transport Integration Project (TanTIP), a flagship initiative aimed at improving road connectivity and transport infrastructure.

However, the audit uncovered that 540.79m/- of this amount were overpaid due to an incorrect application of the price adjustment formula used to calculate compensation for cost changes during project execution.

In a separate case involving the Iringa Regional Road Project (Ipogolo–Kilolo), TANROADS made an additional overpayment of 45.64m/-under IPCs No. 2 and 3. The overpayments included 9.46m/- for rock excavation work that had already been billed in earlier invoices, 18.74m/- for laboratory testing costs that should have been borne by the contractor, and 17.43m/-mistakenly approved as Dispute Avoidance/Adjudication Board (DAAB) fees.

“I recommend TANROADS review its payment procedures to ensure that all price adjustments are calculated in strict accordance with the contract terms, particularly Sub-Clause 3.7.2 of the General Conditions of Contract,” said the CAG.

He also called on the agency to recover the overpaid funds and implement stronger verification systems before approving future payments, to prevent similar financial lapses in ongoing and upcoming infrastructure projects.