Gov’t could collect about $3 billion for overdue projects – President
several defaulting contractors were written to so they could return huge sums of money to the government.
“Across all national projects, letters have been sent out to contractors on liquidated damages to the value of about $3billion (for) projects going on beyond their timeline,” President Ali told reporters at a press conference last week.
Liquidated damages refer to a provision allowing for the payment of a specified sum in the case of a breach of contract.
The President explained that up to 10% of the contracted sum can be collected as liquidated damages; beyond that sum a company’s contract would be terminated.
President Dr Irfaan Ali speaking at his press conference (Photo: Keno George/DPI/June 20, 2023)And he said government agencies must get serious about collecting the liquidated damages.
“The agencies have been advised that liquidated damages is charged on projects without justification in terms of the extension on time.
“Once there is no justifiable reason for the extension of project time, liquidated damages must be charged,” Dr. Ali said.
For weeks now, President Ali and other senior government officials have issued public warnings to contractors. Those warnings come as several ventures- including major road projects- have been delayed, prompting the cancellation of some contracts.
Vice President Dr. Bharrat Jagdeo recently said the administration may not seek the services of those delinquent workers again.
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