Frustrated SCHIP subcontractors to receive outstanding payments soon, Morgan promises

Local subcontractors who worked on the Southern Coastal Highway Improvement Programme (SCHIP) will be paid monies owed to them “shortly”, Minister with responsibility for Works, Robert Morgan has committed.

Morgan’s statement follows concerns from the Incorporated Masterbuilders Association of Jamaica (IMAJ) over the prolonged non-payment of funds owed to its members who worked on SCHIP “despite several high-level engagement and the completion of all required processes”.

Richard Mullings, president of the IMAJ, told The Gleaner that an estimated $2.9 billion is owed to the local contractors.

The China Harbour Engineering Company (CHEC) was engaged as the main contractor for the project which aims to improve the alignment and capacity of the existing southern highway.

The Ministry of Economic Growth and Job Creation, headed by Prime Minister Dr Andrew Holness, is responsible for the project with support from the National Works Agency (NWA).

However, the project, which began in 2017, has experienced a variety of delays, including the impact of the COVID-19 pandemic, logistical challenges, and issues with contractor performance and payments.

The SCHIP is now expected to be completed by 2027.

“Local contractors who have already fulfilled their contractual obligation and completed their works are being subjected to bureaucratic delays and unclear responses when seeking information on the release of funds,” Mullings said in a statement.

Financial pressure

He added that this has placed significant financial pressure on the contractors, who were expecting payment from October last year.

But Morgan stated that it is the Government, and not CHEC, that is now obligated to pay the contractors.

He explained that initial delays were due to CHEC sorting out the claims made by the local contractors and the Government could not intervene at that point.

“There are some outstanding amounts which are due to contractors which needed to have been validated, the process of validation has been completed and the submission is currently at the Ministry of Economic Growth and Job Creation and then it will move to Cabinet where Cabinet will have to approve the payments to contractors. That process is ongoing,” Morgan said.

He stated further that the claims were validated in March and that a Cabinet submission has been written and is with the Attorney General’s Department, after which it will go to the Ministry of Finance and the Public Service which will result in a call on the Budget.

“They are now at the final stage with the Cabinet submission,” he said.

“We think it’s an urgent matter for the contractors to be paid. It’s an issue of cash flow, it’s a matter of process and we guarantee the contractors that they will be paid as soon as the decision is made at Cabinet, and the funds are available.”

Emphasising that the Government “wants to pay the contractors”, Morgan said that since the issue of claims has been rectified “it’s now the Government obligation and the Government’s commitment that, as soon as the process ends … I am very confident that shortly they will be paid,” he said.

Mullings, in the meantime, also raised concerns over the delaying of the issuance of taking over certificates that would signify the completion of a project, or a specific section of it, “even in cases where work has long been completed and accepted”.

He said the absence of these certificates not only prevents final contract closure but also directly affects the release of performance bonds held by the local subcontractors and threatens the sustainability and growth of local firms that have already met their contractual obligations.

“This has a crippling effect on their operational capacity, as the unreleased bonds continue to tie up their financial resources, making it difficult if not impossible for them to secure new bonds or access financing for other critical projects and works,” he said.

However, Damion Anderson, quality control engineer at CHEC, said certificates have been issued, and subcontractors have been receiving due payments from CHEC for work completed.

“We are not aware of any certificates that would have been outstanding for a long time,” he said.

sashana.small@gleanerjm.com