The government is expected to pay 331bn/- debt currently owed to contractors to facilitate the construction and maintenance of the infrastructure sector in the country.
A number of local and foreign contractors’ companies have attributed failure to accomplish their construction tenders on time to lack of financial resources and equipment.
Speaking at a Contractors Registration Board (CRB) Annual General Meeting and Exhibition in Dar es Salaam yesterday, the Minister of Works, Dr John Magufuli announced that the government has included the amount in the 2012/2013 budget to compensate the contractors involved.
“The government will, in this budget, approve the amount needed to be paid to the contractors. We only need commitment and hard work especially from local contractors,” he stressed, urging all contractors to deliver the value for money paid.
The minister stated that the cost of a kilometre of tarmac road construction has decreased from 1.9bn/- to between 680m/- and 700m/-.
He said the reduced cost implied reduced capital requirements and advised the national road construction agency (Tanroads) and the City and Municipal councils to invite and encourage local contractors to seize the opportunity.
Dr Magufuli believes that utilization of local contractors will lower the rate and amount spent in construction of our infrastructure.
The Contractors Registration Board (CRB) chairperson, Consolate Ngimbwa expressed discontent over terms and conditions put in place by commercial banks to access loans. She stressed that the government, in collaboration with the insurance regulatory board, must promote local contractors by creating reasonable terms to access loans and to do away with the existing barriers.
The chairperson, explained that, a number of contractors have been failing to compete for different tenders announced by the Prime Minister’s Office Regional Administration and Local Government due to lack of sufficient capital, both financial and material and given the difficult conditions on borrowing they fare poorly against foreign well funded companies.
A private company already heeding the call is GF Trucks & Equipment Ltd whose Senior Sales Engineer, Juma Hamsini, announced that his company has already started lending construction equipment to local contractors at affordable rates in an effort to empower them to compete with foreign contractors for issued tenders.
According to him, up to 80 percent of tenders announced in the country benefit foreign companies that can afford to meet the requirements and as a result small contractors simply cannot compete.
Already the Parliamentary Infrastructure Committee has discussed the ministry’s budget of over one trn/-to be tabled in the up-coming national budget of the fiscal year 2012/13.