Mr. Yaw Osafo-Maafo, the Senior Minister, has expressed worry about undue delays by some public officials in processing project documents and payment for projects executed by contractors.
He said delays cost the nation huge sums of money through cost overruns and payment of high interest rate on projects.
‘‘Mr. Minister of Finance, if you were to think through how much delays in payment has cost us, it’s phenomenal!
‘‘Our interest rate has been hovering around 25 percent, and so if you borrow US$10million dollars equivalent on cedis at 25 percent the cost of money is GH¢2.5million dollars per annum.
‘‘Assuming the money is available and they delay in its processing between the Minister of Education and Minister of Finance for one month, you’re adding one-12th of the US$2.5million, which is GH¢208,000 dollars depending on which currency you’re dealing with,” Mr. Osafo-Maafo observed.
The Senior Minister expressed those concerns at the ‘Value for Money Conference’ in Accra on Monday.
The event was organised by the Vice-President’s Secretariat and intended to provide standardised cost for public projects and prevent financial wastage, and brought together experts from academia, captains of industry and civil society organisations to find solutions to variations in project values for the construction of roads, schools and hospitals.
Mr. Osafo-Maafo said the cost of every project worldwide depends on a number of factors: including capital, materials, labour of different types and time. Therefore, it is imperative for the nation to standardise cost of public projects.
He urged the committee set up to look into the matter to come out with recommendations that will ensure standard cost for public infrastructure projects.
The Senior Minister made reference to the World Bank’s Study that revealed project delivery inefficiencies cost the nation US$1.1billion per annum.
He therefore asked all public officials to strictly apply provisions in the Public Procurement Act which require public officials to ensure judicious, efficient and economic use of resources.
The Finance Minister, Mr. Ken Ofori-Atta, said standardising the cost of public sector projects would curb corruption in the construction of infrastructure and ensure transparency and accountability.
He said delays and inefficient delivery of public infrastructural projects often destabilises the budget and results in re-valuation of inherited projects at the taxpayer’s expense.
‘’It creates immense difficulty for budgeting when pricing is not right and we fail to pay on time; it leads to build-up of interest rate and re-valuation, which causes untold problems,’’ he observed.
He therefore called for a fundamental change in the thinking of Ghanaians so as to make headway in the nation’s socio-economic development and untie the nation from donor dependency.