Yemen: Houthi corruption reaches the donor-funded Public Works Project

The corruption of the Houthis has not stopped at seizing the reserves of the Yemeni Central Bank, tax and customs revenues, ministries, institutions, government bodies, and private fund budgets. It has also infiltrated the Public Works Project, which relies entirely on external financing for all its activities.

The Public Works Project is one of the most important components of the social safety net aimed at mitigating the side effects of the economic, financial, and administrative reform program adopted by the Yemeni government since March 1995.

The "Central Control and Accounting Agency," managed by the Houthi militia, affirmed in its report on the results of examining and reviewing the projects implemented by the Public Works Project in the capital city during the first quarter of 2022, that the project disbursed large amounts to contractors without justification due to the project's reliance on the Ministry of Finance and the Supreme Tendering Committee's circulars. This resulted in the waste of public funds and the loss of billions of riyals from the state treasury.

The report also pointed out that the analysis committee in the Public Works Project did not fulfill its role regarding the analysis of high-priced tenders compared to other tenders or prevailing prices, and then providing an opinion on them to the relevant tender committee. This resulted in an increase in the contractual cost of the projects.

The annual report of the Public Works Project indicates that the project implemented 182 projects during 2022 at a cost of $17.7 million in the sectors of education, health, water, sanitation, paving, improvement, agriculture, irrigation, afforestation, fisheries, and social affairs.

The report of the Control and Accounting Agency highlighted several shortcomings in the coordination mechanism adopted by the project, which was established in 1996, with the beneficiaries, local councils, and beneficiary entities, resulting in delays in delivering sites to contractors and the delayed implementation of targeted projects.

The cost of completed projects in the third and fourth phases of the Public Works Project until December 2022 is estimated to be over $535 million.

The report also mentioned that the project adopted change works beyond the legal ratio, in addition to not complying with legal controls due to inaccuracies in designs, specifications, and quantity schedules for projects. Moreover, most of the projects were not implemented within the specified timeframes in the contracts, and delay penalties were not calculated for contractors according to the contract conditions, except for a limited number of them. This led to an increase in the risks of project failure.

The Public Works Project was established to achieve several objectives, including creating more job opportunities for skilled and unskilled labor, providing essential services to the most needy groups, improving the economic and environmental conditions of the poor, enhancing the professions of local contracting and engineering consulting, and enhancing popular participation in the development process.