Contractors have asked that government to always pay fines for a delayed settlement.
They complained that while delayed payment for completed works, or delivery of materials or services attract no penalty on the part of government agencies, contractors are subjected to a fine when they fail to deliver on time.
They raised the issue yesterday during a one-day meeting with Ministry of Justice officials on contract management.
For every single day past the deadline, the contractor in question incurs a daily fine of Rwf1 on every Rwf1000.
Theoneste Seburikoko, the manager of ECOTE Ltd, a construction company, said the same fine should be extended to government in case of delays in paying contractors who successfully executed the contract on time.
“If I win a tender to construct a road in one year, I take a loan from the bank expecting to get paid as soon as I complete the works. However, it sometimes takes several months before payment after completion of the works, which makes me unable to meet my own obligations, including paying workers and repaying my loan, which attracts interest,” he said.
Gerard Nkusi Mukubu, the head for advocacy at the Private Sector Federation (PSF), said introducing such fines against public procuring entities could in part contribute to the fight against corruption in tendering processes.
He said, “The same way Rwanda Revenue Authority slaps fines on any taxpayer who fails to meet their tax obligations within the set timeframe, government institutions that fail to pay contractors on time should also pay a fine in the same spirit.”
“This would compel those in charge of paying contractors to do so within agreed time and discourage those who delay payment because they are looking for a bribe.”
Isabella Kalihangabo, the Permanent Secretary and Solicitor general at the Ministry of Justice, urged contractors to always ensure that such terms are clearly catered for during contract negotiations.
“Before signing any contract, both parties should have agreed on all the terms of the contract because the law governing public procurement provides that both parties should agree on all the provisions of the contract, they can also add any provision deemed necessary,” she said.
‘‘It is up to you to ensure that the contracts that you enter with public institutions cater for such issues, otherwise government will not pay for what is not provided for in the contract.”