Roads Fund invests K5.4 billion tollgate funds with banks
The Roads Fund Administration says it has invested over K5 billion with asset managers due to delays by the Public Procurement of Disposal Assets (PPDA) to approve contracts for rehabilitation of the M1 road.
The asset managers include National Bank, NBS Bank and Nico Asset Managers among others.
Speaking during an interface the fund had with the Public Accounts Committee of Parliament, Road Fund Administration Chief Executive Officer Stewart Malata said delays in approving contractors forced them to invest the funds where they expect to get an interest of 15 percent.
“The approval process for large scale projects is multi-pronged as signatures have to be sought from the Anti-Corruption Bureau, the Ministry of Justice and the PPDA among other organs.
“We could not leave the money idle in the banks because it would begin to lose interest due to depreciation of the kwacha, hence the decision to invest,” Malata said.
Chairperson of the Public Accounts Committee Mark Botomani commended the fund for the decision.
Botomani however faulted the Roads Fund for failing to ensure quality of roads that are being constructed in the country.
“Most roads are falling into a dilapidated state soon after finishing construction owing to the poor quality of construction,” Botomani said.
Mwanza Central Parliamentarian Nicholas Dausi called on authorities to start trusting local engineers.
Dausi noted that most projects are being given to foreign companies which are doing a poor and substandard work.
Economics commentator Betchani Tchereni said what the Roads Fund has done is an ingenious way of making sure that the funds do not lose value with time given the volatile macroeconomic situation in which we are.
“Inflation has been rising and the local currency has depreciated against major trading currencies. In order to ensure that the funds have not lost value, it was very prudent and clever of the Roads Authority to do so,” Tchereni said.
He however said it is important to make sure that the interest earnings do not find their way into the dungeon of abuse.
“It is not their money, it is public money,” he said.
Among the delayed road projects include Dedza Loop Road in Dedza District under contract reference RA/MAI/2022-23/T/REH/CR/DZT/DZ/27 and rehabilitation of selected sections of the M1 between Zalewa in Neno and Chingeni in Ntcheu.
