Govt owes local contractors K5.4 billion – Mwanakatwe

Finance Minister Margaret Mwanakatwe has disclosed that government is owing domestic contractors amounts totalling to K5.4 billion for various road projects, as of September this year.

And Mwanakatwe has explained to Parliament government has engaged a new partner to help revive Kabwe’s Mulungushi Textile, despite President Edgar Lungu already ‘commissioning’ operations at the manufacturing plant during the 2016 general election campaigns.

Responding to a question from Kantanshi independent member of parliament Anthony Mumba, who wanted to know the total domestic debt government was owing contractors for road projects, Mwanakatwe broke down the debt saying: “The total domestic debt to contractors for road projects countrywide as of 30th September 2018 stood at K5.4 billion. This amount is broken down as follows: 1. foreign contractors/ consultancy – K2.6 billion; 2. Local contractors/ consultancy – K2.8 billion.”

“Government has no plans to amend road contracts and remove the requirement to pay interests and standing time on unpaid invoices. Instead, government will work out mechanisms where payment for invoices is done on time to avoid interest and standing time charges… further, payment of interest on delayed payment is not peculiar to the road sector, it is a standard for all commercial contracts. This not withstanding, the government through the Road Development Agency (RDA) has increased the standard period of time after which interest is chargeable so as to provide sufficient time for government to mobilise resources. This period has been increased from 28 days after the due date of payment to 56 days after the due date for payment. We will therefore put measures in place to ensure payment within the grace period,” Mwanakatwe explained.

Further, Kabombo UPND member of parliament Ambrose Lufuma, asked the minister to state where government was going to get the money to pay contractors on time, to which Mwanakatwe begged all members to approve the 2019 budget sot that she could start collecting revenue.

“First of all, I am dismantling arrears. After that, I want to pay! Delayed payments is costing me and I want you to help me do that by making sure that you pass my budget for 2019. That budget is very clear that we are going to raise K86.8 billion. So I am really asking you to help me to make sure that laws that we are going to put in place for 2019 budget are passed by the end of this week. So that I can start collecting revenue then I can pay. I have got K14 billion of arrears, I have to pay that, then I have got running contracts, I must pay that. Too,” she stressed.

Meanwhile, Mwanakatwe gave government’s current position on the state of Mulungushi Textiles in Kabwe district.

“The way forward on the future of Mulungushi Textiles was agreed between the Government of Zambia and the People’s Republic of China. The Chinese government committed to assist in the revamping of Mulungushi textiles, this was a bilateral agreement representing the good relations between China and Zambia. With the investment structure and other details of the partnership to be completed in the first quarter of 2019. That’s when I will be able to give you the exact details. Upon which we shall provide a road map for the reopening of Mulungushi textiles. The obsolete state of the equipment at the plant has meant that significant capital is required to revive the plant. Government therefore decided that it was necessary to find partners that would co-invest in the venture and proceed to engage the Chinese government on the way forward,” said Mwanakatwe in response to a question from Chipili independent member of parliament Jewis Chabi.

         

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