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04.04.2008 Business & Finance

Government secures funds to pay contractors

By Daily Graphic
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The government has secured funds to pay all contractors who satisfactorily executed feeder road projects during the 2007 fiscal year but who have not been paid.

The Deputy Minister of Transportation, Mr Magnus Opare Asamoah, told the press in an interview shortly after he had addressed the annual management meeting of the Department of Feeder Roads in Koforidua
yesterday that the contractors were owed GH¢85 million, which had been loaned to the government by the Social Security and National Insurance Trust (SSNIT).

He said although the government was committed to promptly paying road contractors, the failure of road agencies to prioritise road projects and keep to the approved budgets had made it impossible to do so.

“The consequence of this situation is that the government currently owes contractors to the tune of GH¢85 million in respect of periodic and routine maintenance and upgrading works executed in the 2007
fiscal year,” he said, adding that “very soon the money will be paid because Parliament has approved the loan and contractors, particularly those who cannot be on their project sites due to lack of funds, will be on site”.

“This development is very unhealthy and does not augur well for the growth and sustenance of the road construction industry and to avert such a situation in the future, road agencies must endeavour to prioritise contracts and keep within approved budgets,” Mr Opare
Asamoah stated.

The deputy minister, who addressed the meeting on behalf of the sector Minister, Dr R.W. Anane, expressed worry over what he termed a large portfolio of non-performing contracts, some of which he said had more than 50 per cent overruns, and asked all stakeholders to live up to expectation.

With regard to the feeder road network in the country, he said it had witnessed a consistent and appreciable increase in length from 32,600 kilometres in 2001 to 41,000 kilometres in 2007.

Mr Opare Asamoah said such a phenomenal growth was indicative of the government's commitment to provide basic access to the productive areas of the economy within the country's developmental framework, in line with its growth and poverty reduction strategy.

He said since the Road Fund and government budgetary allocation could only cater for about 50 per cent of the maintenance needs of the roads, the Department of Feeder Roads must ensure that the funds would be judiciously applied.

The Eastern Regional Minister, Mr Kwadwo Afram Asiedu, who chaired the function, called for proper rationalisation in road construction to ensure that the vital ones that linked cocoa and food producing areas would be given priority.

He stated that the government was doing its best to construct roads but said the lack of funds had militated against such a laudable programme and advised politicians not to promise people, particularly those in the rural areas, that they would construct or rehabilitate roads in their areas, since that could not be easily fulfilled.

In his welcoming address, the Eastern Regional Director of the Department of Feeder Roads, Mr Elvis Asafo Adjei, said despite the numerous challenges, the department was able to rehabilitate most of the feeder roads in terms of bitumen surfacing, re-gravelling and
other routine maintenance works.

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