The Construction Sector of the Association of Ghana Industries (AGI), has asked government to consider the establishment of a “special development fund.”
The Fund is to cushion contractors “heavily impacted” by high overheads from halted works during the COVID-19 lockdown.
A press statement from the Sector, signed by its Chairman, Mr Rockson Dogbega, said COVID-19 had had its toll on both clients and contractors.
Contractors, it said, were faced with the challenges of fragmentation of the sector players – contractors, consultants, clients, and regulatory bodies.
It said a “special developmental fund” would, therefore, help surmount project financing hurdles and risks.
The statement said the Construction Sector, even before COVID-19, had long been beset with the negative impact of delayed payment and the inability of the clients to meet the cash flow forecast on contractors.
It said COVID-19 had only made a bad situation worse; clients were currently unsure of the immediate future trends, thereby holding back financing capital intensive projects.
The statement said the suggestions were well placed to support the players to make “the construction industry thrive rather than placing it on its knees as COVID-19 threatens to do currently.”
It said there were a lot of impacts of non-adherence to payment timeline on contractors, including financial difficulties with key players unable to effectively plan cash flow resulting in delayed completion of projects.
The statement said other impacts on the non-adherence to the payment on time to contractors were bankruptcy and liquidation of construction firms and key players in the industry, abandonment of projects, negative social impact of projects left hanging and extended disputes to recover the cost by parties.