Business News of 2014-02-07

Contractors push for law to halt delayed payments

The Greater Accra Regional branch of the Association of Road Contractors (ASROC) Ghana, is pushing for a law to protect it against delayed payments for executed road contracts.
The contractors argued that the late payments for contracts executed by them, was negatively affecting not only their jobs but the quality and time used in constructing the nation’s roads.
Mr William Apraku Bondzie, the Greater Accra Regional Chairman of ASROC, said the practice had placed many local road contractors in financial difficulty, because after executing road contracts, their investments, usually commercial bank loans accessed at high interest rates, got locked up with the government for years.
Addressing the news media on the issue in Accra yesterday, Mr Bondzie said the situation was one of the biggest causes of stress for the contractors, adding that it significantly reduced their profits and had rendered a number of them bankrupt.
“Often, we do not even know when we will be paid and some have gone to the extent of selling their property to pay off the loans,” Mr Bondzie stated.
Mr Bondzie said the association was aware that the enactment of such a law would require time and it was prepared and willing to travel the journey to get the law passed.
Payment processes
“The question, we, the members of ASROC, keep asking based on a very disturbing observation is why is it that upon completion of an assigned construction work, contractors have to wait for a minimum of three months for their documents to get processed for payment?” Mr Bondzie asked.
He cited series of documentation, inspections, as well as what he described as “back and forth movements” between road contractors and their respective road agencies, the district assemblies and the Ghana Road Fund Secretariat as some of the processes the contractors had had to endure over the years.
“While all of these back and forth movements go on, road contractors who have taken loans pay huge interests on these loans taken to pre-finance the contract work. This leads to high cost of doing business and reduces profitability.”
Mr Bondzie explained that while the struggle over late payments to contractors had been a protracted one, a lasting solution was yet to be found to it, hence the latest advocacy by the association.
Source: graphic.com
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