By: Ntombi Mhlongo
The formation of the Roads Authority will provide relief to contractors who have for years been frustrated by late payments and project delays whenever they undertake government road infrastructure projects.
This is because the authority will not go via the government Public Finance Management (PFM) systems which have for years been criticised for causing delays and frustrating contractors. Members of Parliament have already passed the Bill that will facilitate the formation of the entity. In motivating for the Bill to be passed, the portfolio committee explained that using the PFM systems will take the country back to old habits where contractors do the work but then face challenges emanating from certain processes that must be followed.
“You find that government processes affect the work of the contractors, and this leads to delays. An account will be opened for the authority and then there will be a finance committee put in place and it will play an oversight role on the funds,” the committee explained in its report. It should be noted that in December 2019, it emerged that the construction industry was one of those most affected by the government’s cash flow crisis. It should be noted that in December 2019, it emerged that the construction industry was one of those most affected by the government’s cash flow crisis. This came after a survey was conduct-ed by the Construction Industry Council (CIC) which revealed that contractors were owed more than E700 million by the government. The findings revealed that such a situation led to companies laying off employees or completely shutting down, resulting in the loss of 400 jobs. The findings were contained in the CIC’s 2018/2019 Annual Report where the then Chief Executive Officer Nhlanhla Dlamini disclosed the country’s low economic growth and government’s poor fiscal position meant the construction industry continued to grapple with challenges and faced an un-certain future.
Meanwhile, the policy of cutting down the number of state-owned enterprises forced the country to do away with a standard set by the World Bank when it comes to the formation of a road authority. The World Bank discourages a situation where the Roads Authority is the one that also manages the monies collected through fuel levies and road charges. Instead, the World Bank encouraged that a separate Road Fund be formed. However, due to the Kingdom of Eswatini’s economic situation and financial status, the committee working on the Roads Authority Bill decided that forming a Roads Fund would mean an addition of yet another parastatal which it felt would not be ideal as the government was trying to cut down costs by abolishing some state-owned enterprises. What has been planned is that a finance committee will be formed, and its man-date will be the collection of monies from fuel levies and road user fees.
One of the duties of the authority will be to ensure that delayed road maintenance is avoided. Experts have argued that most African economies have experienced significant growth in recent years but that growth could have been even greater if the countries concerned had had appropriate transport infrastructure in place. The experts have argued that over the past 15 years, however, the road sector in Africa is the one where most progress has been made in both institutional and financing terms.
The creation of road agencies and road funds financed, in many countries, from fuel levies, has meant that 80 percent of the main road network in Africa is now deemed to be in either good or fair condition.
Affected employees to venture into the construction business
An opportunity to venture into the construction sector will be availed for some employees who will be affected by the abolishment of the Roads Department.
The formation of the construction companies will allow them to apply for tenders with the Roads Authority. This is one of the recommendations made by the portfolio committee which worked on the Roads Authority Bill passed by the House of Assembly.
The committee is said to have deliberated on the fact that there were current employees employed under the Roads Department which falls under the Ministry of Public Works and Transport and that they will need to cease from being civil servants. Some of them, the committee decided, will be employed by the authority while others will, through the Ministry of Public Service, be accommodated in other departments.
“There will be those who will be empowered to open construction companies and get work from the authority,” the committee stated.