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Government to delay payments to contractors

08 Jun 2022

  • PM says Rs. 50 bn in dues for State projects cannot be made yet
  • Notes payment ‘slowdown’ needed to secure forex for essential imports
  • Sajith warns move will create unemployment, discourage investments
  By Imsha Iqbal  The local construction sector, which has been facing financial difficulties for several years, is expected to face more issues, as Prime Minister Ranil Wickremesinghe announced that about Rs. 50 billion due to contractors for State projects will be delayed.  Wickremesinghe, who is also Minister of Finance, Economic Stabilisation, and National Policies, made this remark in Parliament yesterday (7) responding to questions raised by Opposition Leader Sajith Premadasa regarding the Government’s policy in mitigating the woes of the construction industry, as it is among the many industries that have been crippled as a result of the prevailing economic crisis. Premadasa questioned Wickremesinghe about the Government’s stance over paying Rs. 50 billion that is due to local industry stakeholders for the ongoing, completed, and scheduled construction of infrastructure for State enterprises.   Premier Wickremesinghe elaborated that the Government has to “slow down” in paying dues, as it is crucial to save money for importing essential food items this year, even though increasing unemployment is among the concerns.  Premadasa had charged that even at a crucial juncture such as the pandemic, the construction industry was able to survive, but that the industry is now left stranded due to the economic crisis that was caused by wrong decisions made by the Government. “These have resulted in employers unable to pay their workers, which forecasts unemployment, and later, would lead to labour shortages, brain drain, skilled labour migration, and an inequilibrium in the labour force of the island, affecting future investments directly,” he had said.  The industry stakeholders go through hardships due to the inability in paying debt and leasing instalments, while the dollar crunch has hindered construction industry material importation.  In addition, the fuel shortages and power outages have challenged the efficient production process of the industry, affecting all the stakeholders, from small and medium enterprises to the self-employed.   


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