The Minister for Works, Dr John Magufuli, has allayed public fears that the new ministry budget passed late Friday would be spent offsetting debts accumulated in the previous financial year.

Dr Magufuli allayed the fears when winding up debate on the ministry’s estimates he tabled on Thursday morning in Parliament.

According to Dr Magufuli, it was true that until March this year the ministry had accumulated debts amounting to over Sh300 billion but until late Friday evening when he was winding up the debate the government owed contractors not more than Sh50 billion.

When tabling in Parliament the report on the performance of the government on the infrastructure sector for the period between April 2011 and April this year, the chairman of Parliamentary Standing Committee on Infrastructure, Peter Serukamba told the House that most major road projects commissioned in the 2011/2012 financial year were being carried out on credit.

Serukamba told the House in April this year that until March this year, three months before tabling the new budget, the government had disbursed Sh 351.977 billion out of Sh 609.743 billion allocated in the 2011/2012 budget. But, worse still, a huge chunk of money disbursed in the past financial year has been spent in offsetting debts that accumulated while implementing projects in the preceding 2010/2011 financial year, amounting to Sh 420 billion.

“As I speak now here we have settled almost all the debts we owed contractors constructing roads in various areas in the country. Our debt stock now stands at not more than Sh 50 billion which, I hope, will be settled this month,” Dr Magufuli told MPs late Friday when winding up debate.

The Works minister assured MPs that the passed budget was real as it was not meant for offsetting debts accumulated in the just ended financial year. “What we have tabled in this Parliament is what we are going to spend in the new financial year,” he stressed.

Dr Magufuli was compelled to give explanation on the debt stock by Bariadi West MP Andrew Chenge (CCM) due to fears engulfing MPs and the public in general that the ministry owed contractors billions of shillings after it failed to pay for road projects being implemented in the just ended fiscal year.

The same fear was also expressed by Mpanda Central MP Said Arfi (Chadema) who expressed concern that the government owed contractors billions of shillings in construction works carried out in the past financial year. He said some contractors had completed their assignments but were still claiming their money from the government while others were still on sites but the construction works had stalled due to lack of funds.

According to estimates unveiled on Thursday by Minister Dr Magufuli, Sh 693.95 billion has been allocated for development expenditure while Sh329.10 billion is for recurrent expenditure, bringing the sum of Sh1.023 trillion as the total budget for the ministry in the 2012/013 financial year.

According to the minister, out of Sh 693.95 billion allocated for development projects, Sh292.90 billion is domestic funds while Sh 397.10 billion is foreign aid.