Lebanese government, contractors face-off over payments

Lebanese government owes contractors $200mn for bills accumulated since 2011

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RELATED ARTICLES: ACC purchases $100mn Lebanese office complex | Hariri mansion sale to be UK’s biggest ever | Lebanese cement sector to see solid future despite decline The Lebanese government owes contractors around $200 million for bills accumulated since said 2011, said Fouad al-Khazen, head of the Contractors Association, adding that many would freeze projects if the payments were not settled soon. “It has been 15 months since many contractors received any payments and banks are no longer giving out loans to contractors because they feel the government is constantly procrastinating in making the payments,” he told The Daily Star, a local newspaper. Khazen said the association, which represents 2000 contractors had met with caretaker Prime Minister Najib Mikati and caretaker finance minister Mohammad Safadi, adding he would soon meet with caretaker Public Works Minister Ghazi Aridi. Public-works contractors would shut down businesses and lay off workers if the payments were not released, the Association had said earlier. “We are hoping for a quick solution that suits all parties because if the initiatives fail, contactors will not be able to keep working and ongoing projects would be suspended,” he said. “If you have a car that ran out of fuel, it would not take long before it actually stopped”. The Daily Star reported that Mikati suspended payments after several ministries awarded projects in an “arbitrary” manner for roads, water networks and other infrastructure across Lebanon. Finance Ministry officials were not available to comment on why the funds had not been released. Khazen said the lower number of apartment sales did not yet signify a notable decline for the industry. “Wherever you go, you can see cranes and towers being constructed in Beirut. So far there are no serious problems facing private sector contracts,” he said. The construction sector has been facing slowed activity as new construction permits posted significant declines since last year. Construction permits dropped 16.2% in the first six months of 2013, following a drop of 11.7% in 2012, the most recent figures show. Real estate transactions fell by more than 5% in the first seven months of 2013. The real estate market has undergone a shift in demand over the past two years, with the majority of buyers and renters opting for small apartments and shying away from large luxurious ones, the report added.


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