18May 2021
Songa wa Songa
Dodoma News
The Guardian
Works ministry asks for 3.7 amid 800bn/- debt
MINISTRY of Works and Transport yesterday tabled a 3.747trn/ budget estimates for 2021/22 financial year as it owes contractors hundreds of billions of shillings for works done in 2020/21.
In his budget speech presented to the National Assembly, Leonard Chamuriho said as of April 2021, the ministry owed contractors 869,026,582,530.09 for works done, verified and received.
“One of the major challenges we face is lack of funds to implement projects which is occasioned by piling debts owed by contractors and consultants engineers,” he said.
The minister asked the House to approve 3,747,294,095,200.00 for 2021/22 out of which 1,627,244,274,200.00 is for works and 2,120,049,821,000.00 for transport.
He said that in the 2020/21 financial years, the ministry was allocated 1,577,586,781,000.00 for works projects but as of April 2021, only 1,060,741,508,270.64 was disbursed, equal to 67.2 per cent.
In its report, the Parliamentary Infrastructure Development Committee blamed the ministry’s financial woes on low disbursement as well as low collection of revenues by the ministry’s internal sources.
The committee said that disbursement of internal revenues was low from both the consolidated fund and road fund—two main sources of revenue for the ministry.
“The committee established unsatisfactory disbursement of funds by the government whereby as of February 2021, only 138,655,097,992.32 was released by the consolidated funds which was equal to 32 per cent of the allocated resources and 403,184,932,487.02 by the road fund (62.83 per cent),” reads the report.
“The committee’s analysis has pinpointed delays in the issuance of Valua Added Tax (VAT) waivers on works projects as one of the major challenges delaying construction projects.”
The committee advised the ministry to work closely with its Finance and Planning counterpart to ensure that such tax waivers are granted to allow projects to start early and complete within agreed time.
The Ministry of Works and Transport is responsible for promoting a quality, efficient, environmentally friendly, and cost-effective construction industry that facilitates the social and economic development of the country.
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