Government may be facing more challenges in its quest to deliver at the Metropolitan, Municipal and District levels this year as some road, building and electrical contractors have expressed disappointment at the payment of monies owed them for executing government� projects.
Government directed banks and financial institutions in the country in November 2009 to submit data on toxic debts related to contractors� borrowing to the Bank of Ghana (BoG) to offset arrears inherited from the previous administration.
Some of the contractors who spoke to this paper were unhappy because government had delayed payment. However, 2009 was not an exception as civil and building works carried out by some contractors during the previous government had not been honored.
�Most contractors borrow from the bank at higher interest rates at an average of 30 percent to execute projects; hence, any setback in payment of the monies culminate in the interests escalating.
�It compelled us to pay more than the initial sum secured from the banks,� a building contractor who spoke on condition on anonymity told CITY & BUSINESS GUIDE.
A road contractor and a member of the Road Contractors Association of Ghana (ARSOC) however urged government to do more to settle the debts of contractors on time since �any delay would complicate their businesses.�
�The delay in offsetting arrears to contractors should be thoroughly addressed,� a visibly disturbed contractor who plays a major role in Progressive Road Contractors Association also told this paper.
In November 2009, government asked banks to continue to lend to contractors to enable them execute various projects presently suspended because of the lack of capital.
Dr. Kwabena Duffuor told Joy News that government was committed to settling all the debts. This was because various projects had stalled since the banks had supported the contractors.
However, checks by this paper at some commercial banks revealed that the financial intermediaries were hesitant in lending monies to the contractors. Many of the banks had accrued bad debts, a situation which is not supportive of their operations.
The government put the volume of debts that it inherited at GH�1.7 billion but the arrears to be settled are expected to be less as some contractors have already been paid.
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