National Vice President of the Progressive Road Contractors Association of Ghana, Hammond Larbi, has revealed why major road contracts are awarded to foreign based firms instead of local ones.
According to him, the constant saying ‘local firms do not have the capacity to undertake large scale road projects’ is because banks refuse to give them (local contractors) loans. He explained their refusal to grant contractors loans stems from the fact that they (contractors) default loans because they do not receive payment for work done on time.
He revealed that the few times contractors are able to access loans, the interest accrued over the period leave them with nothing and this sometimes leads to their death.
“We don’t have the capacity to undertake large scale projects because banks refuse to give us loans as our payments delay all the time. Some contractors have even died waiting for their payments. The few occasions we are able to secure loans from some financial institutions, they peg their interests at 5percent per month and imagine what happens if it takes 5 years for you to receive payment for your work. You will end up giving all your payment to the financial institution and even paying the excess from your own pockets,” he lamented.
Discussing the theme; ‘Improving Ghana’s road infrastructure through sustained innovative technical and financial engineering’ on the Happy Dialogues series with host Don Kwabena Prah, he added, “that is why we don’t get such contracts and it’s sad.”
Upon them going through all these hardships, contractors are also targeted by revenue authorities to pay income tax on money they are yet to earn, seeing them sell their property to offset these debts.
“These are the real problems contractors deal with on a regular,” he exclaimed.
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