Treasury delays stall road rehabilitation programme
THE Emergency Road Rehabilitation Programme 2 has been moving with pace, but is now being hampered by the late release of funds by Treasury and the Ministry of Transport and Infrastructure Development to contractors according to the Parliamentary Portfolio on Transport.
Addressing the media this week, acting portfolio committee chairperson, Munyaradzi Kazhambe, said the delay in funds disbursements is slowing down the programme that has been on a roll.
Kazhambe noted; “We would like to thank Government for disbursing the Emergency Road Rehabilitation fund, however, the problem we have noted is that the funds are being disbursed late after the contractors have already given their cost of doing the job.”
The local dollar has been losing value at a rapid pace and has depreciated by 56,58 percent this year on the official market to $169 per US dollar.
On the parallel market, which most businesses are using to price their goods, the local currency has lost 82,60 percent of its value year to date to trade at $420 to a dollar.
This has been touted as one of the reasons why relevant authorities should release funds to contractors timely.
“The contractors are getting the disbursement when most of the fund would have been eroded by inflation or it will get to the last person when they would have reviewed their quotations,” Kazhambe added.
Inflation has also been on the rise due to geopolitical tensions and the figure for April came in expectedly higher as pressure on supply chains continues, thereby causing imported inflation to importing countries such as Zimbabwe.
Month on Month inflation, which is the most concerning one, rose by 9,2 percent to close the month at 15.5 percent in April from 6,2 percent in the prior month of March.
Inflation has been on an upward trend since late last year with authorities citing a volatile exchange rate and price distortions for the increase.
According to Zimbabwe Statistics Agency (ZimStats) the month-on-month food and non-alcoholic beverages inflation rate stood at 18,5 percent in April 2022, gaining 12,5 percent points on the March 2022 rate of 6,0 percent.
The month-on-month non-food inflation rate stood at 13,3 percent, gaining 6,8 percent points on the March 2022 rate of 6,5 percent.
In the same month the year-on-year
inflation rate stood at 96,4 percent up from 72 percent the previous month, as a result interest rates turned negative once more.
However, in Treasury’s defence, Ministry of Transport and Infrastructure Development Deputy Minister Mike Madiro, said the delay in disbursements was purely a cashflow issue with Treasury.
“It basically is a cashflow problem on the part of government, nothing else to be honest. First quarter is always slow as legacy payments need to be made at the start of the year and bonuses paid in the fourth quarter and it strains government,” said Madiro.
Given that the funds are entirely internally generated, Treasury gets overwhelmed and begins to prioritise payments, but with companies ending closed season mid-February, funds begin to flow.
“The funds are our own, so the pie is small and the mouth’s to be fed are many, it is not a secret that there definitely will be prioritisation on payments,” he added.
Road rehabilitation is now about to move into third phase which will focus on bridge construction and mapping of the dams to be rehabilitated and constructed is already underway, according to the ministry of transport.
Speaking to Senate last week, Minister of Transport Felix Mhona said, “The phases of road rehabilitation are intertwined and they run concurrently as they are not really related to each other as each phase has its own mandate.”
The first phase focused on major highways such as Harare – Mutare and Harare – Masvingo highway, with the second road targeting inner city link roads.