ACTING Housing & Infrastructure Development Minister Sylvia Chalikosa says the Industrial Development Cooperation’s $44.8 million investment in the Chinese owned Marcopolo Tiles company will bring increased revenue to the treasury.
She was responding to a question from Mazabuka Central UPND member of parliament Gary Nkombo who wanted to know why government was investing huge sums of money in a tile making company but was canceling road construction projects.
“In the beginning, you started canceling road contracts or infrastructure contracts that were below 80 percent from one of the Presidential pronouncements citing austerity measures. Last week your government invested in excess $44 million and I stand to be corrected by that figure through the Industrial Development Cooperation (IDC) to invest money in a company that makes tiles called Marcopolo. Wouldn’t you agree with me that this is a clear misplacement of priorities by your government and an act of wanting to look smart because these cancelations do come with a cost for breach of contracts? Have you calculated how much it will cost this government as a result of all these cancelations including the 22 kilometers of Mazabuka roads that you left at 65 percent?” asked Nkombo.
In her response Chalikosa said there were certain companies that were of high economic value which government needed to invest in to increase revenue for the treasury.
“I would like to assure the honourable member for Mazabuka Central that all decisions that are made by government are interrogated to see whether it will be beneficial to all parties involved. I think I mentioned earlier that one of the modes of financing for these roads is the CFI mode which is contractor finance initiative form of financing. So as discussions are made there is attention paid to this type of financing and when a cancellation is made of course the risks are going to be worked out. The IDC investing in the tiles, there are certain companies that are of economic high value. This decision to invest in other companies that will bring in revenue to the treasury are the very decisions that government needs to make to introduce revenue to the treasury in order for the treasury to begin to be able to spend money into other sectors. So if the decision was made to invest in the tile making company which would result in high revenue income to the treasury, then it is a good decision. Rather we use a company that is making money than have no company at all and then struggle to look for money to invest in the road sector. So the advantages and disadvantages are weighed before a decision to cancel is made,” Chalikosa said.
Earlier, Roan NDC member of parliament Joseph Chishala asked Chalikosa when road works in Luanshya District, under the C400 Road Project would commence, how many kilometres of road works were earmarked for the district, what the source of funds for the project was, what was the name of the contractor for the project, and what the time frame for the completion of the project was.
In her response, Chalikosa said the C400 road project was due for cancelation following guidance from the Ministry of Finance.
“The contract for the rehabilitation of 406 kilometers of urban roads on the Copperbelt Province on the C400 road project is due for cancelation following guidance from the Ministry of Finance. 65.95 Kilometers of road was earmarked for construction in Luanshya district under the C400 project. Road work in Luanshya district will only commence once alternative financing is secured. The project was initially planned for execution using the contractor facilitated initiative mode of financing using funds from the Development Bank of China. The contractor engaged on the C400 project is China Henan International Cooperation Group company limited. The time frame for completion of the project was 48 months from the date of commencement,” said Chalikosa.
“Indeed, the initiative to put toll gates on the road to gain government the extra revenue has come under the PF administration and we are very proud of that. What you really need to realise is that this money is also deposited into control 99 where the priorities of where this money will be expended has to follow through. Indeed because it is coming from toll gates the roads are a priority but they are other competing needs that also have to be considered once the money is in control 99.”