Contractors in Financial Distress as Gov’t Payments Lag, MNACI Reports

MV+ News Desk | October 8, 2023
Photo: MV+

The Maldives National Association of Construction Industry (MNACI) has voiced concerns over the financial hardships being endured by contractors, attributing them to delayed payments for government projects.

In an official statement, MNACI highlighted the predicament faced by contractors involved in Public Sector Investment Program (PSIP) projects and other initiatives aimed at provincial development. Despite adhering to their contractual obligations and submitting invoices as agreed, these contractors are experiencing significant delays in receiving payments.

The protracted payment process imposed by the government has created a ripple effect, making it challenging for private firms to remunerate their employees, cover essential expenditures such as meals, and settle bills with suppliers for construction materials.

The resultant cash flow shortages have led to disruptions in the payment of employee salaries, prompting some workers to halt their duties, as outlined by the association. The government has been approached on numerous occasions to address this issue, but a viable solution remains elusive.

In response to this pressing matter, MNACI has called upon the government to consider imposing penalties on contractors who fail to settle their invoices within the stipulated time frame.

Furthermore, MNACI has expressed grave concern regarding the non-payment of more than 100 contractors and suppliers who were instrumental in executing numerous PSIP projects. These entities have yet to receive the compensation they are entitled to, as stipulated by regulations.

As of the current year, the government has allocated MVR 8.4 billion for over 900 projects under the PSIP, with MVR 8.2 billion having been expended thus far. The persistent issue of delayed payments remains a subject of significant concern for both the construction industry and the government.

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