Kwame Governs Agbodza, National Democratic Congress (NDC) Member of Parliament (MP) for Adaklu and Minister-designate for the Ministry of Roads and Highways appeared calm and unassuming on Monday, January 20, 2025 when he took his turn at the Appointments Committee for public hearing on the portfolio he has been appointed by President John Dramani Mahama to handle.
But when he started answering questions from members of the committee as the public hearing heated up, he demonstrated his wealth of knowledge about the sector he has been the Ranking Member for at least over the last four years.
One interesting revelation he made that got everybody to sit up was the colossal amount of money wasted on road contracts, which only benefits the banks that loan out money to road contractors.For instance, Agbodza noted that an amount of GHS665 million is wasted on road contracts worth GHS113 million.
This waste, he noted, accrues as a result of compound interest on the contract sum when there are delays in paying the contractor the contract sum after completing his or her job.
“If you owe GHS113 million and because we are unable to pay, the interest on the GHS113 million is now GHS665 million. What it means is that the GHS665 million is a waste to the people of this country. Because that money is not GHS665 million worth of road works. It is just 30% compounding interest on the unpaid amount”, he noted.
He added “Ghanaians get GHS113 million worth of roads but they pay extra GHS665million money on nothing. I am not saying it is peculiar and only started today. It is the way road construction contracts are put together in this country”.
Solution
The challenge at hand, he added, must be thoroughly examined, proposing a stakeholder engagement to address the issue. He insisted that the old way of doing things was not sustainable.
“I believe that the time has come for us to bring together all players in the road sector to see how we can make this sustainable. If the government keeps owing and we are not paying, we are not even a better customer to the contractor. That is why today when you call some contractors you want to award them some work, they will tell you it is better to sleep than to take a job because it will become a debt on their head”, he noted.
De-capping Road Fund
One other way to address the challenge, he told the Committee, was to de-cap the Road Fund to make timely releases of money to pay road contractors. The capping of the Road Fund, according to Agbodza, who is also the Majority Chief Whip, puts a restriction on the Road Fund in terms of releases.
“When you see the amount of money collected into the Road Fund, and the amount of money that the government pays as GoG, it turns out that basically, the Finance Ministry just takes part of the Road Fund and keeps it and gives it back to them as GoG Funds. So, in other words, they don’t actually put in much money for themselves.
“I will still continue to advocate for the Road Fund to be de-capped because it is better for them to have that money and pay off contractors on the whole to stop the compounding interest than to keep on capping, taking away more than 50% of the money and the problem will still be with us”, he underscored.
By Stephen Odoi-Larbi
