Contractors association urges timely payment after gov’t repays dues

AMMAN — The Jordanian Construction Contractors Association on Tuesday expressed appreciation for the government’s repayment of JD350 million owed to the private sector.

The Finance Ministry announced on Sunday announced that the government had paid back JD350 million owed to the private sector over the last two weeks.

"The money the government paid back does not only go to the contractor, but also goes to the 100 to 150 related professions and industries," Jordanian Construction Contractors Association President Ahmad Yacoub said. 

Finance Minister Mohamad Al-Ississ said that the ministry during the last week of December 2019 paid back JD250 million, followed by JD100 million during this week. 

Yacoub said that while the government is to be thanked for this step, there needs to be a mechanism for timely payments to the contracting sector, since it is tied to many other sectors. 

The biggest portion of the money went to the contracting sector, Yacoub said, while noting the association will carry out a study to ensure that all contractors have received their due payments.

The government’s repayment will positively impact the local economy, the association president said. He added that the amount will stimulate related sectors as well.

Yacoub urged the government to commit to the 56-day window when paying their dues after a tender's period expires. 

The finance minister at the time highlighted that addressing overdue financial arrears aims at stimulating the economy and improving performance, which in return would cut the State Treasury's costs and enhance the efficiency of public financial management, as well as boost trust in financial transactions.

The contracting sector and Desert Highway received JD95 million, support for municipalities and universities amounted to JD40 million, health and transportation sectors received JD35 million, the water sector received JD22 million, expropriations stood at JD20 million, while JD17 million was allocated for tax refunds and JD15 million for drug stores.

Economist Husam Ayesh commended the government’s step, noting that it aligns with its executive packages and current approach of improving liquidity in the market and increasing local spending. 

"The government's commitment to its responsibilities towards the private sector, whether the contractors association, companies or individuals, helps stimulate the economy, since the government receives a percentage of the amount back in the form of taxes," Ayesh said.

"This is around $0.5 billion of additional liquidity in the market, which will surely have a positive impact, and shows the government's true intent to increase the economy's momentum in 2020," he added.