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Gov’t freezes new road contracts due to indebtness

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untarred roadThe Ministry of Roads and Highways has put a freeze on the award of new road contracts in view of the huge indebtedness in the sector.

Last April, road contractors claimed that the government was indebted to them to the tune of about GH¢400 million.

The decision by the ministry to freeze new road contracts, according to the Minister of Roads and Highways, Alhaji Amin Amidu Sulemani, was to free the few resources available to the sector to complete ongoing projects across the length and breadth of the country.

Although he could not give the exact indebtedness to the contractors, Alhaji Sulemani said in an interview that the amount was high such that the government could not award new contracts.

The freeze, which is already in motion, might enter into the next year or two, depending on the availability of resources to complete projects that were already ongoing, Alhaji Sulemani told the Daily Graphic.

Explaining the rationale behind the freeze, the minister indicated that “there are too many uncontrolled award of contracts and we are currently heavily indebted. We think if we stop the award of new contracts, we will have some funds to complete some of the projects on time”.

He stated that some of the projects were at critical stages of construction and funds were needed to complete them.

The Ministry of Roads and Highways has three key agencies that execute its projects and these are the Ghana Highway Authority (GHA) in charge of trunk roads or main aeterials, the Department of Urban Roads (DUR), for urban roads and the Department of Feeder Roads (DFR), for rural roads, including the cocoa access roads.

New road projects are financed under the Consolidated Fund, while road maintenance projects are serviced with funds accruing from the Ghana Road Fund Secretariat (GRFS).

Indications are that these two sources of funding are overstretched, hence the hue and cry over the lack of payment for ongoing construction or rehabilitation works.

According to the President of the Association of Road Contractors, Mr Ebow Hewton, members of the association and those of the Progressive Road Contractors Association, numbering more than 1,000, had not been paid for nearly 13 months.

The last time contractors were paid through the GRFS for the DFR was in June, 2012. That of the DUR and the GHA was in March, last year.

Under the Consolidated Fund, however, all three agencies had not been paid since October, last year, Mr Newton stated.

Suffering projects

Currently, many projects have stalled, largely due to lack of payment.

Work on the Kpando-Worawora-Dambai highway, being executed by Messrs Shinsung Engineering and Construction Company of Korea, is progressing steadily, despite delayed payment.

The government is yet to clear an outstanding payment of GH¢12.15 million accrued from January, last year, to April, this year.

While work progresses on that corridor, work on the Asikuma Junction-Kpeve road has slowed down considerably. The contractor has virtually packed out of the site, citing non-payment for work done as the reason for his action.

What is more, A and N Ghanem, the contractor executing the Tamale-Salaga road, has threatened to abandon the site if the government failed to pay for work it has so far carried out on the stretch and others the company has already completed.

These are but a few of the road projects which have stalled due to non-payment.

Way forward

To address the financial deficit in the roads sector, Mr Hewton said the government must take that bold step to increase the fuel levy, so that it conformed to the World Bank target of nine cents (18 pesewas).

Presently, the fuel levy is three cents (six pesewas) and has remained same since 2005, but that, according to Mr Hewton, must change if the government should be able to generate enough funds to meet the increasing demand for good roads.

He indicated that while resources were dwindling, the roads were also getting worse, with many contractors abandoning their sites as a result of non-payment.

Source: Daily Graphic

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