By Kingsley Jassi:
Improved fuel levy collections have enabled Roads Fund Administration (RFA) to re-engage with financial markets as it pursues financing for several new road projects and maintenance works.
For years, RFA faced severe funding constraints after the government froze fuel levy adjustments in an effort to keep fuel prices low, amid mounting external and domestic pressures.
The fuel levy accounts for more than 80 percent of the administration’s revenue.
However, recent government records indicate a reduction in fuel levy arrears and under-collections from fuel marketers.
The arrears peaked, at K1.29 trillion, in October last year.
With the fuel levy arrears alone reaching K504 billion, they are reportedly down by 20.5 percent to K401 billion.
According to RFA Director of Finance Alex Makhwatha, with the improved inflows, the fund is working with commercial banks to frontload finances for a number of projects, including the Chiweta- Karonga Road stretch on the M1 Road and an interchange at Kameza in Blantyre City.
He could not provide further details in a sideline interview at the launch of the K7.4 billion road project and a bailey bridge connecting Area 47 and Area 49, crossing Lingadzi River in Lilongwe.
“There is an improved flow of fuel levy and that has enabled us to work with the banks on a number of facilities. When we get such facilities, we are able to finance projects and pay the banks as we receive the fuel levy,” he said.
A number of projects, including Golomoti Monkey Bay, are under construction while city and town roads received K56 billion from RFA for maintenance, thanks to the fuel levy.
However, Local Government Minister Ben Phiri recently said while taxpayers’ money was flowing into the roads sub-sector, there was fraud that needed to be tamed.
Phiri alleged that some contractors and some district council officials were conniving to bloat project budgets.
“These projects will not have provisions for addendum. The projects must be completed within schedule and my ministry will ensure this happens because that [the addendum provision] is used to defraud taxpayers.
“We must respect taxpayers’ money,” Phiri said.