Government has begun paying road contractors with up to GH5 million validated claims, persons close to the transaction have told Joy Business.
According to government sources, this is in a bid to get road contractors back on-site to address the poor state of some road network in the country.
This move is coming on back complains by some contractors over delays in securing payments for road projects done as well as those that are ongoing.
How is this payment being done?
The payment JoyBusiness has learned was being done through Fidelity Bank and it is being done through a zero per cent discount for contractors owing under ¢5 million cedis.
“This also means that all contractors owed over ¢5 million will be paid up to ¢5 million by government covered at a 0% discount” a source added.
Persons close to the paying bank have indicated that it can be described as zero discounting, which they believe would provide an avenue providing liquidity to contractors.
Background
Government since 2018 midyear budget review expressed a strong eagerness to implement a financing strategy that will facilitate the payment of debts owed to contractors, going as far back as 2013.
The number of contractors that have been paid as at the October 10 is 63 out of 192 contractors that have signed up for the interim payment certificates IPCs.
Government is there force calling on contractors with validated claims to come forward starting from Friday for their payments.
The payments are expected to cover a historical 82% of government’s outstanding validated debts with road contractors, 1226 in total, from road fund.
Government will honor all arrears under ¢5 million, which constitutes 80% of contractors owed (192 in total).