State-owned Special Purpose Companies, like the Education Facilities Company Ltd (EFCL), NIDCO and Udecott owe contractors upwards of $500 million.
President of the Joint Consultative Council (JCC) Fazir Khan yesterday issued a letter in response to the Prime Ministers statement on Friday about the country not having “elastic money” and the old ways of doing things should “fall to the wayside.”
In his letter, Khan said he hoped that the debt owed to contractors was not one of the things to fall to the wayside or be spontaneously reduced.
In a telephone interview, Khan said that SPC’s owed contractors millions, some debts going back over five years.
“The EFCL owes the lions share,” he said.
The EFCL customarily handled the repairs and upgrades to schools but that portfolio is not managed by the National Maintenance Training and Security Company (MTS).
“That is part of the ploy by the Government to not respect the simple fact that they owe money through this SPC for works that were done a long time ago and for which the public has beneficial use,” he said.
“It is rather dishonest.”
He said one strategy was to retain a contractor already being owed money to work on another project and tell them the debt would be liquidated in time.
In his letter, Khan said that the Government used an “unstated but transparent strategy since 2015″ to ignore the legitimate debt owed mostly by special purpose companies (SPCs) to private companies. This dismissal of the money owed, Khan said, forced private companies to seek redress in the courts, usually at high costs for associated legal services. This he said only served to further exacerbate the cash flow problems.”
The Government, he stated, “has no problem paying for its share of legal services during this process but surreptitiously relies instead, on the statute of limitations four-year bar on bringing civil matters to court.
“If one has no conscience one could say that it is a good strategy to reduce government debt and one can picture the Minister of Finance chuckling and patting himself on the back at this achievement.”
Khan said that the Minister of Finance was aware of the hundreds of millions of dollars legitimately owed by the EFCL, NIDCO and Udecott to the construction industry.
Khan said that the SPC’s have continuously requested revamped quotes, asking for costs to be reduced by contractors.
“The JCC again appeals directly to the PM to address this matter that has already resulted in some companies having to close down while others tether on the brink,” Khan said.
Khan said that the Prime Minister needed to take “full responsibility for this travesty being deliberately perpetrated by his government.”
“This perversion is perpetuated through this government’s dismal track record of not operationalising the Office of the Procurement Regulator after the baton was passed in 2015 with the parent Procurement Act in place,” he said.
“While it is unlawful at this time for the Government to continue to issue contracts for projects that they have not secured financing for; without the Procurement Regulations (laid in the House of Representatives on July 2, 2021) enacted there can be no lawful complaint brought to the OPR against this wholly unsustainable, dastardly behaviour by our duly elected government,” he added.
