Ministry Pays 90 % of Contract Works Under 2007 Fiscal Year

Story: Lucy Adoma Yeboah. December 29,2007 (spread)
THE Ministry of Finance has stated that it has paid about 90 per cent of contract works that were budgeted for in the 2007 fiscal year.
It said payments to some road and building contractors working on government projects had delayed because some ministries, departments and agencies (MDAs) gave out contracts over and above their budgetary allocation for the year, a situation the ministry observed was making it difficult for some contractors to get paid on time.
Reacting to a letter carried by the Daily Graphic on December 10, 2007, with the headline: “The Agony of Building and Road Contractors”, written by Seidu Sofo of Navrongo in the Upper East Region, the Minister of Finance and Economic Planning, Mr Kwadwo Baah-Wiredu, said it was unfortunate that the decision by some MDAs to give out additional contracts besides what was budgeted for usually created problems when it came to payment.
A summary of financial position compiled by the Ghana Road Fund and presented by the minister indicated that out of a GH¢107,414,892.00 allocated for works on highways, urban and feeder roads for the 2007 fiscal year, GH¢94,279,0455.61 had been disbursed at the end of November, 2007.
Mr Baah-Wiredu explained that it was not the intention of the government to delay the payment of works, adding that it was always difficult to raise funds to make prompt payments outside the budget.
Seidu Sofo, in the letter, said contractors went through a lot of nightmare and unpalatable experiences to undertake constructional works. He said they borrowed money and building materials at very exorbitant cost, but after the completion of projects, cumbersome procedures were followed for between six months and year, or even more, before they got paid.
He observed that interest rates kept soaring and contractors used every means to avoid harassment by the suppliers of building materials.
“It is not easy, especially within the road sector, to be specific the Department of Urban Roads. While the department pays unrealistic rates, it also unduly delays payments. The whole of this year, only six contractors have been paid, while the majority are still waiting. The reason is that the government is broke.”
Mr Baah-Wiredu observed that although it was true that some contractors had not been paid, it was not correct that the whole of this year, only six contractors had been paid.
The Finance Minister said inasmuch as he sympathised with those who had not been paid for work done, he wished that the writer should have had his facts right instead of presenting a wrong fact for public consumption.
Mr Baah-Wiredu said the ministry was prepared to publish the names and addresses of all contractors who had been paid so far and the amount involved.
He said in addition to paying for jobs given out this year, the government had to take care of indebtedness brought forward from 2006.
He expressed displeasure at the attitude of those MDAs who failed to make things clear to contractors they engaged to work for them and advised that such groups should be told exactly when they could pay them for them to plan accordingly.
The Chief Director of the Ministry of Finance and Economic Planning, Nana Juaben-Boateng Sirebour, pointed out that to avoid a situation where some contractors had to wait for too long to receive payments, the MDAs which engaged them should pay those who first finished their work.
He advised that the MDAs involved should concentrate on paying the old debts instead of awarding new contracts.
The Director of Budget, Mr Kwabena Adjei-Mensah, said there was the need to find means to raise enough revenue to enable the country to pay for the needed infrastructure, adding that for instance, funds raised from petroleum tax by the Ghana Road Fund for road construction was not enough to take care of the demand for new roads and rehabilitation works.