Rs.87bn worth contractors’ arrears to be settled by issuing bonds

The Ministry of Transport and Highways has reached an agreement with the Treasury to settle Rs.87 billion worth arrears to contractors via bonds before the Sinhala and Tamil New year in April this year.

Under the arrangement, Cabinet Spokesperson and Minister of Transport, Highways and Mass Media, Bandula Gunawardana yesterday revealed that the Treasury has agreed to issue 1-year, 2-year and 3-year bonds to contractors based on the projected allocations for next three years.
Accordingly, he shared that the Ministry is in the process of settling 40 percent of outstanding payments within this month and another 30 percent next month via bonds. 

“We will settle all outstanding payments before the New Year celebrations this year,” he said.
Gunawardana pointed out that most of the contractors in particular SMEs are faced with financial constraints due to delayed payments while facing increasing pressure from banks to settle loans taken to undertake government projects.