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17.07.2004 Business & Finance

State Realistic Prices For Quality Work - Director

By GNA

Bolgatanga, July 17, GNA - Mr. Martin hMensa, Director of Feeder Roads on Friday called on road contractors to quote realistic prices when bidding for contracts to enable them do good quality work. " Even though contracts would always be awarded to the lowest bidder, it must be realistic otherwise, a price that is clearly inadequate would not be accepted," he added.

Mr. hMensa who was meeting with road contractors of the Upper East Region in Bolgatanga expressed concern that some contractors tend to quote ridiculously low prices when they bid for contracts which would not only fail to cover cost of good quality work but would also deprive them of profit.

He advised them not to rely solely on engineers to do the pricing of the contracts they bid, saying, " you are the best people to price your work and you know that your aim is not to get into debt but make profit which will also serve as an incentive for you to continue to work".

Speaking on funding, he advised them not to rely so much on banks, because they would pay more on interest than the 10 per cent profit they are expected to make on any given contract.

Mr. hMensa added that, "If you would borrow from the bank, do it when it is absolutely necessary and even then, compare the interest rate to the profit you will make and see whether it is worth it." The contractors complained of high taxes and payment of workers Social Security and National Insurance Trust (SSNIT), which draws on their coffers and leaves them, too broke to compete meaningfully in bidding for contracts.

They appealed to government, which is their major client to make the Price Adjustment Factor (PAF) and ex-gratia components on contracts operational adding that considering the level of inflation and instability on the currency exchange rate, the PAF does not sufficiently compensate the actual value of work delayed.

Mr. hMensa who was on a three-day duty tour to the region, earlier inspected on-going projects on feeder roads and expressed appreciation to the contractors in the region for executing quality work. 17 Jul 04

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