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EU decries public finance management

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The European Union (EU) has said it is concerned with the poor public finance management in the transport sector.

Head of the EU delegation in Malawi Marchel Germmann said this in Lilongwe yesterday during the opening of Seventh Joint Transport Sector Review.

“I want to point out that we remain concerned about the state of public finance management in the sector. As mentioned in previous Joint Sector reviews, we are concerned by the accumulation of overdue payments in the road construction sector.

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“These overdue payments are crippling the industry and have come about as a result of over-commitment of new upgrading construction contracts without sufficient consideration to cash-flows required to sustain these multi-year projects,” he said.

He added: “Also, as micro-economic and fiscal situation remain dire, strict prioritisation of activities is paramount to allocate resources most effectively.

“In particular, we expect postponement of non-essential road upgrading projects until later. During these times of limited funding available to your Ministry, it is imperative that only those investments that can guarantee highest financial benefits are selected for implementation.”

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Minister of Transport and Public works, Francis Kasaila, said government has put in place measures to improve financial management.

“It’s always government’s wish that there is transparency and accountability in the sector. As one way of ensuring that, we have made sure that there is separation of powers between Roads Fund Administration and Roads Authority. For example, RFA deals with issues of financial management, and procurement,” Kasaila said.

On prioritisation of projects, Kasaila said that is what government is doing at the moment.

“At the moment, we are completing projects that were started a long time ago. However, we are doing minor maintenances to some sections that have been neglected for a long time. We cannot just leave them. This is however, not on a large scale,” he said.

Speaking during the opening of the function, Kasaila expressed sadness with the end of government’s special relationship with the EU, as the lead development partner in the transport sector.

“For the past 20 years, EU has been a key player in the area of transport sector reforms. To highlight a few areas, it supported the creation of Roads Fund Administration and Roads Authority,” he said.

He added: “The shift in the EU’s attention to other sectors will, therefore, leave a huge gap. Nevertheless, we recognise that this is not the end of our relationship, as there is still room to access funds for infrastructure project through EU’s regional programme.”

This year’s review was held under the theme: Revitalising the Transport Sector through Reforms: The Move Towards A Safe, Efficient, Reliable, Sustainable And Equitable Transport System’.

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