Chairman of the Road Contractors Association, John Afful, has bemoaned the devastating state members of the Association are in owing to the debt government owes them.
During a press briefing on Friday, May 24, Finance Minister Dr. Mohammed Amin Adam stated that the government had spent approximately GH¢49 billion on payments to contractors.
But this claim has been disputed by the Association of Contractors. In an interview on TV3, Mr Afful, government should direct its members to claim the money it claims to have paid.
According to him, some members have lost their lives due to the economic hardships they have faced since government has failed to pay what is due them.
“We’re in pain; some of our members are even dead. If they’ve indeed paid us, they should show us where it is so we can go for our money,” said.
Also, the Ghana Chamber of Construction Industry has lamented the plight of many of its members due to an unpaid debt of GH¢15 billion owed by the government, which has accumulated since 2014.
According to the Chamber, this situation has resulted in the deaths of some members, others being bedridden, and several facing lawsuits from their financiers due to delays in repaying loans.
He described the dire condition many contractors are facing due to the government’s failure to pay the GH¢15 billion debt accrued since 2019.
“Every day, labourers and professionals, financial institutions, cement dealers, and fuel suppliers, are all calling and demanding for their money from one contractor, bringing untold thinking and health difficulties to us,” he said.
“Some contractors have died. There’s one contractor in good standing who is currently bedridden and cannot do anything; I spoke with the wife last week Friday, and even money to take care of him is a problem. A lot of them are also in court,” Mr Cherry added.
He clarified that the funds allocated to contractors are divided into different categories, which include covering interest payments on loans. This often leaves them with only around five percent or a maximum of ten percent of the total contract amount.
“So, if the contractor works and the certificate that’s supposed to have been honoured within 91 days travels to 600 days or 1,000 days and over, the financial institutions that loan money to the contractor will convert their simple interest into compound interest, because there’s a default.
Therefore, at the end of the day, if a contractor is being paid, all those monies go to the financial institutions, without a drop left for the contractor… some contractors have now become blacklisted,” he said.
According to Mr. Cherry, the breakdown of the debt includes GH¢6 billion owed to contractors since 2017, accumulated from Road Fund projects, and GH¢5 billion from Government of Ghana contracts since 2019.
Additionally, there is GH¢4.4 billion owed for Cocoa Board (COCOBOD) road projects accumulated since 2014, of which GH¢1 billion has been paid in the last month, and GH¢600 million for Ghana Education Trust Fund (GETFund) projects.
Mr. Cherry also mentioned outstanding debts owed to contractors in the Energy sector and for the government’s recent Agenda 111 hospital projects.
He emphasized that if the aforementioned GH¢49 billion had been paid, numerous suspended projects across the country would have resumed, and the pace of work would have increased. However, this is not the current situation.
The Chamber’s CEO, however, said they were willing to jaw-jaw with the government for a solution regarding the payment of debts, adding, “Should things not go well, the government will see the other side of us [contractors].”
The Speaker said that the Chamber had already taken action in that direction and that a meeting with the Minister of Works and Housing was set for May 27. Later this week, a meeting with the Minister of Finance was anticipated.