Road and building contractors cry out over GH¢16bn arrears

Road and building contractors are demanding the immediate payment of debts totalling over GH¢16 billion that government owes them.

The indebtedness has made maintenance of equipment, serving of loan principal and interest, payment of salaries, payment of taxes and other associated expenses impossible.

This has forced over 90% of road and building contractors to pack out of project sites.

Dr Bawumia petitioned

Chief Executive Officer (CEO) of Ghana Chamber of Construction Industry (GCCI) Emmanuel Cherry said they have petitioned Vice-President Dr Mahamudu Bawumia who has referred them to the Minister of Finance for redress.

NPP govt inherited GH₵17.8bn commitment fees

Minister for Roads and Highways, Kwasi Amoako-Atta has said government inherited GH₵17.8 billion as ‘commitment fees’ from the previous administration on road contracts.

Previous govt collateral Road Fund with GH¢1.3 UBA loan

Most road projects are paid for by the government and the Road Fund, but unfortunately the previous administration in 2016 used the fund as collateral and borrowed GH¢1.3 billion from UBA.

GH¢10bn paid to contractors in 4 years

In February 2021, Amoako-Atta during his vetting told the Appointments Committee of Parliament that  government had paid a total of GH¢10 billion to road contractors over four years but more effort ought to be made to clear the remaining arrears.

10,875 kilometres of roads under NPP

The NPP government said 10,875 kilometres of new roads were constructed within the five years between 2017 and 2021.

4,910 kilometres are spot improvement

Out of this, 4,910 kilometres are grading works by Department of feeder Roads in respect of spot improvement.

COCOBOD owes GH¢4bn for cocoa roads

Giving a breakdown of the outstanding debt, Cherry explained that Ghana Cocoa Board (COCOBOD) owes over GH¢4 billion for cocoa roads constructed.

Road Fund owes GH¢6bn

According to him, the Road Fund which is designated for financing road projects is also owing over GH¢6 billion.

Govt owes over GH¢5bn

The Ghana Chamber of Construction Industry CEO added that outstanding debts in respect of Government of Ghana projects is about GH¢5 billion.

GETFund owes over GH¢300m

Cherry stated that the Ghana Education Trust Fund (GETFund) which finances education infrastructure projects owes over GH¢300 million.

3 development authorities also owe

He disclosed that the Coastal, Middle and Northern Belt Development Authorities also owe debts in respect of infrastructure projects executed by contractors.

He therefore described as unfair government awarding all big construction contracts to foreign companies.

In order to build their capacity to compete with foreign counterparts, he appealed for prompt payment for executed projects.

According to him, delayed payment which leads to erosion of their capital as result of worsening economic conditions is destroying their capacities.

Cherry argued that government giving major contracts to local contractors and paying them on time will help position them to compete with their foreign counterparts.

More importantly, he made the case that government acting positively to build their capacity will position them to take advantage of African Continental Free Trade Area (AfCFTA) for the good of Ghana.