Contractors demand upward adjustment of fuel levy

They were at the seat of government  to discuss issues affecting their work.

Mr Hewton indicated that fuel levy contributed significantly to the road fund, saying the low  fuel levy made it difficult for the government to pay contractors from the road fund for projects executed.

 Therefore, he said, a review of the fuel levy should be done in  a non-partisan manner, since the low funding had made it impossible for the government to support the rehabilitation of roads.

"The Members of Parliament should take a second look at the fuel levy in a non-partisan manner," he said.

He said the non-partisan approach was crucial because poor roads did not discriminate against Ghanaians based on their political affiliations.

Mr Hewton said the delay in the payment of work executed was one of the challenges facing local contractors and, therefore, asked the government to award contracts which had budgetary allocation to sanitise the system of payment.

He asked the government to impress on foreign contractors to sublet between 20 and 30 per cent of their contracts to local contractors, saying that would allow for technology transfer and support to local contractors.

Responding, President Mahama said only about 30 per cent of the population paid direct tax, hence the importance of indirect tax, including the fuel levy.

He said once the road fund got distressed, it affected the execution of projects.

The President said the government was forced to intervene by borrowing money from the Social Security and National  Insurance Trust (SSNIT) to support the road fund.

He said servicing the SSNIT loan became a burden on the road fund and, therefore, now it was crucial for the government to budget for the roads that it wanted to contract to avoid delay in the payment of contract fees.

Besides, he said, the government wanted to decentralise the payment of contract fees to avoid the current situation where contractors would have to travel to Accra to receive payments for contracts executed in the regions.

The President said the government would reduce the bureaucracy by allowing engineers on site and one official from the Ministry of Roads and Highways to sign payment certificates for them.

On delayed payment to contractors, he said the Minister of Roads and Highway was raising money to pay contractors for the projects executed.

The President said the road sector constituted about 97 per cent of the country's transportation and, therefore, the government was committed to looking for other sources of funding to support road construction.

President Mahama said it should be possible for government-designated projects to be given to only local contractors, saying such a move would build the capacity of local contractors and retain the money in the country.

However, he said, donor partners mostly wanted their contractors to execute projects that they funded.

He underscored the need for local contractors to build their capacity to win more contracts in the country and go outside the country to bid for more.

Story by Musah Yahaya Jafaru