Business News of Monday, 20 June 2022
Source: www.ghanaweb.live
2022-06-20Contractors struggling to survive – Adam Bonaa urges government to settle debts
Dr Adam Bonaa says the situation has left several roads in a deplorable state
Road contractors leaving their sites, says GhCCI
GhCCI calls government on government to settle owed contractors
Contractors struggling to get by, says GhCCI
The continuous failure of government to make payments for awarded road contracts is having dire consequences on the construction industry.
This is according to the Vice Chairman of the Ghana Chamber of Construction Industry,
Read full articleDr Adam Bonaa who has noted that about 90% of road contractors have had to abandon their sites due to a lack of funds.
In an interview with GhanaWeb, the Vice-Chairman of GhCCI stated that while the government between 2017 and 2020 fulfilled such financial commitments to road contractors, it has since 2020 failed to meet the commitments.
“I will say for the whole of this year and probably for a while, some of them haven’t had payments. You have different categories. The payment regime improved between 2017 to 2020 but from 2020-2021 upwards you would want to say payments to contractors has been very bad,” he said.
According to the vice-chair, this coupled with the current rise in the cost of operations is threatening the survival of several construction firms in the country.
“That is affecting contractors, just look at the price of cement today. Look at how much a litre of fuel cost. Most of these contractors depend heavily on fuel and other raw materials to be able to build roads and schools for this country. So just imagine. Inflation has moved from less than 10% to about 28% almost 30%. Look at the exchange rates and payments still aren’t coming, it’s terrible,” he bemoaned.
Dr Bonaa, therefore, implored the ministry of finance and its associated banks to take pragmatic measures to ensure the struggling industry is saved from collapse.
“If you have certificates that have been forwarded to the finance ministry and subsequently forwarded to Fidelity (Bank)
and other supporting banks and payments aren’t coming, obviously you will not be able to do the work. So Ghanaian contractors are suffocating. Most of them have actually shutdown their plants, bitumen plants and quarries. Some of them have laid off staff, largely [because] most of them can’t pay salaries and this is not somebody telling me. At the Chamber we deal them, that is how bad the situation is."
“So mine is that the ministry of finance and Fidelity Bank, the other supporting banks must come clear. They must come clear and make sure as soon as possible the payments come. If not at the end of the rainy season, most of the very good roads that have been fixed and would have needed a bit of maintenance would have been badly damaged. And we go back to zero, we will have to go back again and begin to construct the same roads that we would could have just maintained to keep them going,” he added.
