The country incurs additional cost any time projects are stalled, experts have said. Not only do stalled road projects frustrate and inconvenience commuters, but it has also been found to add extra financial burden to the state and the contractors.
Stalled road projects are a regular occurrence in Ghana. Experts say the projects are mostly stalled due to the lack of proper project planning which leads to lack of or inadequate funding.
With this phenomenon, many road projects are completed behind schedule taking longer than the planned or agreed completion date.
Despite the inconveniences associated with delayed road projects in Ghana, the President of Ghana Institution of Engineering (GhIE), Ing. Kwabena Bempong has revealed that stalled road projects result in cost escalations that stretch the financial burdens of the project financiers.
Speaking in an interview with The High Street Journal, Ing. Bempong revealed that stalled projects mostly trigger a chain of reaction that drives upwards, the contract costs.
He explained that stalled projects due to lack of finance further create additional financial burdens for contractors especially those funded by creditors. The lack of funding leads to default in loan obligations hence increasing interest payments.
He added that some contractors for the period the project has stalled continue to incur costs on the idle equipment. In the event that the stalling of the project forces the contractor to demobilize, extra funds are needed to remobilize when the project is set to resume.
With these situations associated with stalled projects, Ing. Bempong noted that many contracts are adjusted to accommodate the extra costs incurred.
The high and structural engineer noted that in addition to the extra cost incurred through interest payments, “you are required to pay for idle equipment and often the need for a variation of the contract so that the contractor will receive more money before he can continue. There could even be situations where the contractor will be demobilized from the site. If he demobilizes from the site, you have to pay him for remobilization.”
These delays leading to cost overruns not only burden the already stressed finances of the state but also hinder the delivery of other critical infrastructure including other developmental projects. With this insight from Ing. Bempong, it is imperative that relevant authorities prioritize better planning, secured funding, timely payments, and efficient supervision to avoid delays that lead to extra costs on the state coffers.
