Road contracts to be priced in cedis

Government will be looking to fashion a module for road contracts and delayed payments to contractors aimed at indexing the Ghana cedi against the dollar, which is expected to keep contracts administration and management within a certain limit.

The Roads and Highways Minister, Alhaji Inusah Fuseini, told B&FT that he intends to form a technical audit team alongside the Finance Ministry primarily to audit contracts; especially “contracts being indexed to the dollar, to look at variation regime and see which contracts ought to have been varied and whether variation is within acceptable limits; and interest of delayed payments and how they arise -- whether it is the fault of our officers or the Ministry of Finance”.

According to the Roads Minister, the Committee to be announced is expected to design a strategy geared at finding an antidote to delays in road contracts and to reduce interest payments.

“We have been looking for ways to reduce delay in payment, contract variation, reduce interest payments and indexisation of contracts -- that is contracts being indexed to the dollar which clearly is always gaining ground against the cedi, making contracts very expensive.”

Speaking at the Public Accounts Committee (PAC) hearing, Alhaji Fuseini admitted that “it takes time for payment to be made to contractors”.

He explained that delayed payments can arise out of the contractor going to submit claims, with the verification process taking a long time “at the lower level to the Ministry of Highways for onward submission to the Ministry of Finance for processing and payment”.

The Finance Ministry is reportedly one of the institutions that hold up payments to contractors with delays in the processing of certificates.

However, the Roads Minister disclosed that the Ministry has now introduced a new way of ensuring the time for processing certificate is reduced and has set timelines as well.

“We are saying that a certificate must be prepared and submitted to the Ministry of Roads and Highways within three months after completion of work, so that we can process it for payment at the Ministry of Finance.

The law on road contracts stipulates that contractors will be paid within 90 days. “If you don’t work backward and ensure that you set timelines for people for follow, you will pay interest on delayed payments.

That is what we are doing now. But with the Ministry of Finance we are unable to influence them to pay certificates on time, because they have to aggregate all the tax revenue and allocate resources, such that they would be in tandem with the budget that was presented to parliament and apply these resources to payments for work and contracts done,” he concluded.