The Infrastructure Development Ministry has said delays in road projects are caused by fiscal problems, which have led some contactors to suspend jobs for having 331bn/- deficit.
Permanent Secretary Herbert Mrango told the Parliamentary Public Accounts Committee (PAC) that most of the roads under progress had been trapped as the contractors suspended the jobs due to payment delays.
He said the ministry had been overwhelmed by debts and lacked funds to enable it to complete road projects on time. He said until February this year, the ministry had a debt of 331bn/- of which it could not pay by itself.
“The budget is always insufficient to meet road construction projects in the country,” he said.
He noted that, the contractors, who had suspended their projects included the ones dealing with the following road projects: Tabora–Nzega, Tabora–Kigoma and Bariadi–Lamadi.
Mrango mentioned some of the reasons that contributed to the debt as delayed fund disbursement from the Treasury. He said once the ministry budget was passed by the parliament, it took too long for the Treasury to allocate it.
He said the government had promised to provide them with 317bn/- to pay the contractors but it had not fulfilled its promise. He said if the ministry was issued with the funds on time it would have paid some contractors to continue with the job.
He noted that the ministry was capable of paying the remaining 14bn/- from its own sources.
Elaborating further, Mrango said most of the foreign contractors were not paid on time because their payments had to be done in the US dollar.
He said among the roads projects, which had been suspended was the Ndundu–Somanga road (60kms). He said the project required 58.8bn/- but due to financial constraints they had been able to pay only 46bn/-.
He said in the 2009/10 year, the ministry’s debts totalled 54bn/- but in June 2010/11 increased to 420bn/-.
Meanwhile, PAC Chairman John Cheyo said the parliament approved 1.15trn/- for the ministry in the 2011/12 fiscal year but yet it had failed to deliver.
Cheyo said it was important for the government to ensure the contractors were paid on time to complete their projects since demand for roads in Tanzania was very high.
“The Ministry of Infrastructure Development should stop depending on an unpredictable budget. It should find reliable sources,” he noted.
He stressed that the Treasury should ensure the contractors were paid by the end of this fiscal year.
For his part, Tanzania National Roads Agency (Tanroads) Chief Executive Officer Eng Patrick Mfugale said financial constraints were the major problem facing the ministry and its agencies.