Government through the Roads Fund Administration (RFA) has started settling arrears for contractors. However, while the contractors appreciate this development, they are now worried about entering into new contracts with the government.
According to the contractors under the Malawi Building, Civil Engineering, and Allied Trade Association (Mabcata), as of September last year, the arrears amounted to about K50 billion.
However, RFA states that it owes the contractors K18 billion only.
RFA spokesperson Masauko Mngwaluko said they received K9.03 billion from the Treasury, which has been used to partially settle the outstanding arrears.
He said: “We will continue to make payments as funds become available.”
However, Mngwaluko said they are yet to start receiving the fuel levy, and the agency is also owed about K152 billion in fuel levies from last year by the Malawi Energy Regulatory Authority.
Speaking separately, Roads Authority chief executive officer Engineer Ammiel Champiti acknowledged that the contractors’ ability to work depends on timely cash flow.
He admitted that cash flow challenges exist but assured that the government is committed to funding all maintenance and major works projects, along with support from development partners.
In an interview, Mabcata vice-chairperson Kondwani Kadango said the resumption of payments was welcome.
“However, we call on the need for assurances from RA and RFA regarding timely payments after project completion,” he said.
Last year, Mabcata members threatened to take control of Chingeni and Kalinyeke toll gates on the M1 to demand payment of their arrears.
In November 2023, Minister of Transport and Public Works Jacob Hara informed Parliament about the government’s challenges in funding maintenance works on roads due to difficulties in raising funds through road levies.
