90 per cent of public development contracts awarded to single contractor, report shows

MPs on Thursday heard that a staggering 90 per cent of public contracts for development projects are being awarded to a single contractor, raising eyebrows and concerns about the transparency and efficiency of the contract allocation process.

This revelation emerged during a session of the House audit committee, which discussed a report by the auditor-general on the management control of public contracts, delays, extensions and cost overruns.

The committee, led by president Zacharias Koulias, expressed deep reservations about the prevailing situation. Koulias voiced his unease, emphasising that such a high concentration of contracts in the hands of a single contractor is indicative of underlying issues within the system.

He further revealed that the investigation had unveiled a fundamental problem: the 650 contracting authorities responsible for awarding these contracts often lack the necessary expertise. This deficiency has led to contractors exploiting certain terms during contract negotiations, with some penalty clauses for project delays reduced to a mere 3 per cent, rather than the standard 20 per cent. As a result, contractors have sometimes opted to accept these minimal penalties, further complicating the issue.

To address these concerns, the MPs recommended a drastic reduction in the number of contracting authorities. This move aims to streamline the process and ensure that the authorities handling contracts possess the required specialisation and expertise to make sound decisions.

The report from the auditor-general also shed light on other alarming statistics.

Delays in signing contracts exceeded 60 per cent, and delays in the completion of projects reached nearly 80 per cent. Furthermore, there were substantial cost overruns in a significant number of contracts.

Equally troubling, the report highlighted quality issues and defective work in a staggering 80 per cent of the projects, leading to increased maintenance and repair costs, and ultimately putting a greater financial burden on taxpayers.