REPORT ON MASOTSHA NDLOVU

CMED BOQ
ABSTRACT

This report seeks to highlight an analysis of the Masotsha Ndlovu Bill of Quantities for CMED

Pvt Limited. There was a price difference of USD$ 2 039 000. There are many contributing factors

to this difference in cost of carrying out the project. This report seeks to analyze all factors which

contributed to the price difference

The report categorizes the cost difference for every aspect of the BOQ used in tendering for the

Masotsha Ndlovu works which were awarded to CMED. The categories of the BOQ which were

used in this report include Preliminaries and General, Earthworks Drains and Kerbing, Asphalt

surfacing and Road signs and Marking.

All contributing factors pertaining to the price and rates variation were carefully looked at and

highlighted in this report. The Masotsha Ndlovu was a road that was tendered in the early stages

of the ERRP program carried out under The Ministry of Transport and Infrastructural Development

financed by the Ministry of Finance and Funded by Zinara.

As with all tenders under the ministry of Transport the tenders were priced in USD$ but the

contracts were paid in RTGS$ at the prevailing auction rate on the day of claim approval. The

way companies are able to sustain themselves during the duration of such projects is the use of

Interim Payment Certificates approved by the Ministry’s resident engineer. The certificates

outline the stages that the contractor has completed and has been approved by Ministry Officials

as being up to their standards. The contractor will then be paid a some as specified in the Bill of

Quantities for the works he has completed

COMPARISON OF APPROXIMATE BILL OF QUANTITIES

Instant Tar Bill of Quantities

Amount :USD$ 6 754 317.29

CMED BILL OF QUANTITIES

PRICE: USD$ 8 593 603.16

Considering the first figure we notice that the 2023 priced BOQ for Instant Tar Zimbabwe related

to the Masotsha Ndlovu works is a sum of USD$ 6 754 317.29 whilst that which was priced by

CMED in 2021 is USD$ 8 593 603.16. Such a huge price difference can be related to different

factors which are analyzed in some sections of this report which will follow.

This tender had also a factor of variation when it was advertised. This implies that CMED could

alter its tender value depending on the price changes of many important materials required for this

project through the duration of this project. The variation implies that Cmed can change its tender

value as the prices of some essential materials which were priced in the BOQ such as Bitumen,

diesel, MC30 and others materials changes.

Due to Instant Tar having not participated in this tender when it was opened there cannot be enough

information as to if this tender had any advance payment. Which would allow the contractor a

certain percentage of the Project value so that he may be able to commence the works
PRICE COMPARISON

The analysis of the Bill of Quantities for Instant Tar and Cmed showed a variation of USD$ 1 839
285,87. This variation resulted in Instant Tar having a lower tendering price as of 2023 compared
to CMED’s tender price as of 2021. There are many factors that could have led to such a huge
margin

• Preliminaries and General

The preliminaries for instant Tar had a sum of 139 100,10. Those of Cmed had a value of 160
000.The difference in these values comes due to the fact that when this bill belonging to CMED
was priced some of the Engineers requirements such as a Legend 50 (4*4) double cab was much
more expensive in 2021 as it is currently this is due to the vehicle being a latest Model during that
time than what it now is.

Other requirements such as the Core i7 laptops where quite expensive during that period which
the tender was awarded.,

• Earthworks

The price for earthwork activities for ITZ is USD$ 1 502 738.49 whilst that for CMED is USD$ 1
482 842.25. The price for Instant Tar is very high when in comes to carrying out earthwork
activities than that required by CMED. Instant Tar Zimbabwe has no essential earthworks
equipment and sorely relies on renting equipment from other companies such as CMED itself. This
allows CMED to place competitive values on earthwork activities as they can reduce the cost of
utilizing their equipment for the project with a bare minimum profit.

As for Instant Tar Zimbabwe we cannot control the rates of earthworks as the equipment we use
is obtained at very high rental prices.
 • SURFACING

The tender value of Asphalt Surfacing works for Instant Tar Zimbabwe is lower as compared to
that of CMED as expressed above the ability to control rates and prices fully depends on a
company’s assets in terms of essential equipment which is very vital in a civil engineering field.

Instant Tar is the proud owners of a 300ton/hr asphalt plant. This allows the prices for asphalt
laying and production to be as low as ever with regards to being very competitive. As for CMED
they rely on hiring asphalt plants which require payment before any production could be done.

• OTHER FACTORS

These bills of quantities were priced using different periods. The CMED BOQ was priced in 2021
whilst that of Instant Tar Zimbabwe was priced in 2023.These years differ in more ways than one.
The country’s’ economic in 2023 is much better as compared to 2021.This implies that this report
despite showing values in tender value has some degree of Inaccuracy as the prices of commodities
in 2021 are far much different than in 2023

During the 2021 period which this tender was opened it was a period that was under the Covid-19
Pandemic hence a lot of companies were closed down. This relates to asphalt plants. There were
few asphalt plants during that period as compared to date. This allowed plant owners to freely
control asphalt prices hence the prices during this period were higher as companies monopolized
prices.

Since CMED does not own a plant it was forced to buy asphalt a very high prices therefor the price
in their BOQ has to be higher to cater for this.

As these two Entities are different companies the profit margins used differ. Companies do not
operate using the same profit percentages. This is the case in this report where the percentage profit
required by ITZ for a project is different from that required by CMED for its projects

There has been a changed in TAX from 2021 to 2023 with the value changing from 14% to 15%
this means that the value of the tender for CMED may be lower than what the bill might actually
be valued at in 2023.
CMED labour rates differ from those at Instant Tar this is due to the fact that over a course of 2
years payrates differ without taking into account factors such as inflation and competitiveness in
the construction industry as more and more companies emerge and start operating

This report aimed to highlight what could have caused the price difference in tender values
between a tender done in 2021 and that done in 2023 by a different company hence there are so
many factors that may have contributed to the price variation which could not be exhausted.

Yours Sincerely

For: Instant Tar Zimbabwe

Managing Director (Operations)

Mr. J Ndhlovu