Govt. owes billions of rupees to construction contractors
Sri Lankan government construction contractors numbering around 3000 are in an urgent need of funding for their survival as they have to recover Rs. 150 billion outstanding payment for the work completed in public construction projects including buildings and infrastructure facilities.
This has resulted in widespread unemployment at present due to closing down of small and medium scale construction companies and if the delay in outstanding payments continues, it could affect the livelihoods of about 1.2 million people in the sector, Ministry of Housing and Development sources said.
President Ranil Wickremesinghe in his capacity as the Finance Minister has directed the Department of Treasury Operations to explore the possibility of making a payment of Rs.50 billion considering the dire straits of government contractors.
The Ministry has already suspended the development project work and the repayment of dues to contractors but it is making arrangements to pay at least Rs. 20 billion out of the total amount to them by the end of this year in accordance with cash availability, a senior Treasury official disclosed.
It is also considering releasing at least Rs. 500 million from the outstanding payments to the Provincial and District level projects, to provide some relief to small- and medium-scale construction companies.
The Ministry is to formally request for funding from the Central Bank by raising the relevant cash through Treasury bills and Treasury bonds to meet any urgent financial requirements, he said.
Some of these contractors have obtained loans by mortgaging their house and property to carry out the construction work and they are now in danger of losing their homes and assets to banks, several contractors complained.
In addition, the fuel shortages and power outages have affected the efficient production process of the industry, affecting all the stakeholders, from small and medium enterprises to the self-employed.
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