Local Contractors in the country trading under the banner ‘Concerned Indigenous Contractors’ are this morning scheduled to hold demonstrations in the capital Lilongwe over failure by the Roads Funds Administration to settle their payments amounting to MK14 billion.

In a leaked letter seen by this publication addressed to RFA Chief Executive Officer, the local contractors are accusing the state owned company of violating contractual agreement which stipulate that ‘RFA should pay contractors before the expiry of 45 days after the certification of the measured works by the Project Manager.’

According to the letter, the delay by the RFA to settle payment has affected them as some are losing business.

“Banks and other financial institutions are on our neck demanding repayment of loans. Laborers are suing us for their unpaid wages and salaries at Labour Office.

“We are incurring Malawi Revenue Authority penalties on value added tax and corporate tax. Malawian owned businesses are facing closure due to failure to pay debts to financial institutions which may result in seizure of properties,” reads part of the letter addressed RFA CEO.

The contractors are scheduled to march from Mbowe Filling Station to RFA where they are scheduled to present their petition.

The local contractors want RFA to resolve the issue within 14 days.

Below is the letter;

Date:  21^st May 2024

 FROM: Concerned Indigenous Contractors

 TO:         The Chief Executive Officer

Road Fund Adiminstration

P/ Bag 369

Lilongwe

 PETITION OVER ROAD FUND ADMINISTRATION’S STOPPAGE TO PAY CONTRACTORS OVER MK14 BILLION

 BACKGROUND

We the undersigned contractors have noted with great concern that the Roads Fund Administration ceased honouring payments for certificates in January 2024. This is despite our respective contracts stipulating that your office should pay contractors before the expiry of 45 days after the certification of the measured works by the Project Manager.

Since January 2024, one hundred and fifty days have elapsed without any pay to us the contractors which is very unfortunate, especially in view of the current inflation and loss of value of the Malawi kwacha.

This situation has created and is continuing creating the following unbearable issues to our businesses hence worth our bringing to your attention:

• No cash flow
• Banks and other financial institutions are on our neck demanding repayment of loans
• Laborers are suing us for their unpaid wages and salaries at Labour Office
• Possible evictions from rented offices
• We are incurring Malawi Revenue Authority penalties on value added tax and corporate tax
• Malawian owned businesses are facing closure due to failure to pay debts to financial institutions which may result in seizure of properties

 For your information, as contractors we reserve the right to charge an extra 2 percent interest above the commercial rate on all certificates whose payments have not been honoured after 45 days from dates of issue as stipulated in GCC43.1 read in conjunction with SCC43.1 of the Contract.

It is therefore against this background that the contractors are demanding their payments within 14 days starting from 21^st May 2024.

 

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