Contracts remain intact but funding to delay – Joseph Osei-Owusu

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The First Deputy Speaker of Parliament and MP for Asante-Bekwei, Joseph Osei-Owusu, has indicated that all roads that have been earmarked for construction this year are intact and will be delivered, but funding to some contractors may delay.

According to the Dep. Speaker, government is going to face a huge funding challenge in paying the contractors due to revenue shortfall from oil receipts and other revenue sources, as COVID-19 has eroded revenues for all projections made in the 2020 budget – a reason government wants to lower the cap on the Stabilisation Fund and access the Heritage Fund among others to beef-up revenue.

“Year of roads would not be affected by COVID-19, except maybe in funding because a huge funding gap has developed due to the sharp drop in our projected oil revenue from US$2 billion to less than half and customs revenue as well so we should expect that the amount of money available to us will drop.

No road will be left out as a result of the funding gap; what will happen is that some contractors will be paid early while others may delay.  In road funding, largely, the contractors’ fund and government pays them later; and so it will be same, but the rate of payment is going to delay a little longer.

Indeed, the whole essence of lowering the cap on the Heritage Fund, Contingency Fund and also going to borrow from the IMF is to get enough funds to cover revenue shortfall. However, all that put together is still not enough to cover all our gap; so the Finance Minister has to rearrange and decide which of the gaps we will cover and which to leave out,” he said.

In addition, he emphasised that government is aware of the poor nature of some major roads in the country, hence declaration of the year as ‘year of roads’. Therefore, all roads that have been awarded on contract will proceed steadily as outlined in the specific contracts.

Commenting on roadworks ongoing in Bekwei Municipality, which is his constituency, he said: “Road works are going on very seriously; about five contractors are working on different roads in my constituency, and all of them are still working because the COVID-19 lockdown restrictions excluded contractors and none of the roads will be left out”.

It will be recalled that the Finance Minister, Ken Ofori-Atta, in his 2020 Budget presentation to Parliament in November 2019 declared this year as ‘Year of Roads’, stating that funds have been mobilised for the construction of over 150 roads nationwide in addition to commencing the first phase of Sinohydro roads and ongoing cocoa roads.

The Finance Minister indicated that government will largely focus on and prioritise road projects to improve infrastructure in that sector and bring an end to the cries of Ghanaians; but considering the adverse effects of COVID-19 on the economy of the country a few months after that declaration, it is a worry to many that this cannot be achieved against the fact a chunk of the money for these road projects are expected to come from oil revenues which have been hit hard.

Most of Ghana’s roads are reportedly in bad shape, and according to statistics from the Ministry of roads, of the total road network of more than 780,000 kilometres under the portfolio of the Ministry of Roads and Highways, only about 27 percent is paved.

The paved roads include trunk, feeder and urban roads, with 41 percent of the total network in good condition.

 

 

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