The Mozambican government is concerned at the delays in many projects of the Millennium Challenge Account (MCC) in the country.

Interviewed on Monday, Minister of Planning and Development Aiuba Cuereneia said all the projects should be concluded and delivered by April 2013, but due to the delays the deadline has been extended to June 30, and there can be no further extension.

The agreement with the financing agency ends on Sept. 23, 2013.

The MCC signed a compact with Mozambique in 2007 for a sum of 506.9 million U.S. dollars, and the five year implementation period began in September 2008.

The minister said the money, channelled through the Millennium Challenge Account (MCA), was to be spent on projects concentrated in the northern and central provinces.

The delays in several of the projects put at risk Mozambique's chances of qualifying for a second compact. The U.S. Embassy in Maputo said last week that the MCC is not recommending to its board that a second compact be signed with Mozambique.

Nonetheless, a spurt of good performance in the final months of the current contract might persuade the MCC to change its mind. The U.S. embassy said in a press release that if the leadership shown by Mozambique produces sufficient progress in the final 11 months of the compact, the country may be in a better position to be considered for a second compact by the MCC Board in December 2013.

In the final three months of the compact, July to September 2013, the Mozambican branch of the MCA will be wound up, its Mozambican staff will return to their previous jobs, audits will be concluded, and all the remaining equipment will be redistributed, said Cuereneia.

"As from June, there will be no further disbursement of funds for the building works, and any remaining money will be returned to the American treasury," he said.

"A country such as Mozambique, with so many needs, cannot allow itself the luxury of returning money that has been donated."

The worst delays are in the rehabilitation of a 75 kilometer stretch of Mozambique's main north-south highway, between Mecutuchi and the Lurio river in Nampula province, which was in the hands of a Portuguese consortium, and the construction of a new water supply system for the port city of Nacala, where the tender was won by an Indian contractor.

According to the minister, in the case of the Mecutuchi-Lurio road, the Portuguese companies Monte Adriano and Casais are said to be facing severe financial difficulties and so have been unable to mobilize all the equipment necessary for the job.

Cuereneia ruled out the possibility of hiring a new contractor to do the job. He said there is simply not enough time to hold another tender.

The consortium will have to solve the problem, and one of the possible solutions is to sub-contract other companies, or to acquire equipment within Mozambique or in the region in order to complete the job.

As for the Nacala water supply system, Cuereneia believed it was possible to finish the work by May, despite the delays.

The minister dismissed the arguments presented by the companies to justify their delays as groundless. Those arguments include delays in mobilizing equipment, lack of skilled Mozambican staff to handle equipment, a high turnover of labor and the Mozambican rains.

As for labor shortages, the companies showed no signs of looking for Mozambican technical staff. They had not, for instance, advertised in the Mozambican press.

Cuereneia added that, in terms of the general social and economic indicators demanded by the MCC, Mozambique is eligible for a second compact.

These indicators include investment in human capital, through such measures as increased access to primary education, keeping girls at school longer, and reducing the infant mortality rate.