Government to pay debts to private contractors this month, Correa says; Cuenca officials worry about late tram construction payments

President Rafael Correa said Saturday that all private contractors owed money by the government will be paid in January. According to the Finance Ministry, the debt to contractors is $1.56 billion.

President Rafael Correa

“In January we will be up to date with all payments to government suppliers,” Correa said in his weekly television broadcast in Santa Elena Province.

In recent weeks, organizations representing contractors have complained that in some cases, unpaid government bills are six months overdue. The Chamber of Construction Industries says that 43 large construction firms are owned hundreds of millions of dollars and have been forced to lay off employees as a result.

Construction and transportation contractors for government oil operations in Orellana Province have been especially hard-hit. Juan Carlos Andrade, President of the National Federation of Heavy Transport, says that 98% of government debts have gone unpaid during the last four months of 2015.

Some government opponents have claimed that the unpaid bills are evidence that Quito is out of money. “The government squandered its money during the years when oil prices were high and failed to plan for today’s situation, “ says Guayaquil Mayor Jamie Nebot.

In Cuenca, city officials admit that they are nervous about the late release of funds for construction of the tram. Although the money was allocated four years ago, the federal government is more than a month in arrears to the city and private contractors.

“There is cause for concern but we are hopeful that the late payments will not cause work stoppages,” said tram project manager Gerard Fernandez. “We have faith that the government will pay its debts this month.”

Finance Ministry representative Marco Avila said the payment delays were the result of funding gaps that occur at the end of every fiscal year.

“I understand that late payments can cause discomfort for contractors,” Avila says. “We ask for patience and understanding until the situation is resolved.”