"Under the Responsibility Clause"... The Contractors Union Demands Members to Stop Bidding for All Tenders and Procurement Funded by the Ministry of Finance

SadaNews - Special to "SadaNews" - Today, Monday, contracting companies and contractors received a circular from the Contractors Union demanding them to immediately cease bidding for all tenders and procurement funded by the Ministry of Finance, even partially. The Contractors Union stated in the circular, which followed demands to the Ministry of Finance to negotiate the Union's requests and which "SadaNews" has seen: "Bidding for all tenders and procurement funded by the Ministry of Finance, even partially, is prohibited, with no exceptions for any tender, regardless of its nature, under the responsibility clause." Ahmed Al-Qadi, President of the Contractors Union, commented on this escalatory move to "SadaNews", saying that matters with the Ministry of Finance have reached a dead end despite the Union's efforts to engage the ministry and request a seat at the negotiation table to settle outstanding issues, most of which revolve around the accumulation of debts owed to contractors without any prospect for resolution. Al-Qadi added, "We fully understand the economic and political situation the country is going through, so we have repeatedly requested a meeting with the minister to discuss how to settle outstanding issues, but we have not received any response." He pointed out that the government cannot turn its back on the contracting sector in this manner, especially amidst a severe financial crisis. He emphasized that the shared responsibility necessitates sitting down at a table to discuss how to alleviate the burdens on the contracting sector in light of the government's inability to meet its obligations towards contractors. He noted that there are no accurate figures regarding the scale of debts owed to contractors, as some claims are entered in the accounting system while others are still in the procedural phase. Al-Qadi remarked, "What is happening in the contracting sector with the Ministry of Finance is a farce. Tenders typically require the Ministry of Finance to pay the tender value 56 days after execution, but several years pass without this being implemented, noting that contractors have not received any payments from their accumulated debts for several months." He indicated that the Ministry of Finance had previously paid around 16% of the claim value upon execution, then it was reduced to 10%, then to 6%, and finally only 1.8% of the claim value before it completely stopped disbursing any payments. He noted that contracting companies are suffering as they are forced to bear high interest on loans, saying, "What is currently happening is that contracting companies are having to borrow from the banking sector to manage their affairs despite their accumulated debts owed by the government, indicating that the high-interest over several years of borrowing effectively makes the companies lose money on projects executed by the Ministry of Finance, alongside the declining dollar value which has significantly harmed the companies and contractors." He added, "The contracting sector constitutes about 16-17% of the Gross Domestic Product. If the government had a correct vision, it would inject liquidity into it to energize it, as it is the main driver for many other sectors and employs the largest percentage of the workforce in Palestine." He pointed out that the credit situation for many contracting companies with banks has worsened due to their difficulties stemming from the current situation and the Ministry of Finance's inability to meet its commitments, stating, "Practically, the interest has consumed profits and part of the capital, leaving us no room to reconcile between the taxes owed by companies and their accumulated debts to the ministry." He noted that there are some complications from the ministry even in disbursing supported tenders, adding that there are funded tenders that remain in the procedures for several months. He clarified that the government is responsible for finding solutions to many of the problems faced by the sector, including returned checks and the presence of defaulters, a phenomenon that is increasing day by day without any signs of finding solutions. A few days ago, the Palestinian Contractors Union issued a statement containing a set of decisions to regulate the work of contracting companies that are members of it in light of the "oppressive" practices that have been imposed on these companies in many contracts. The Union stated in its statement: "In light of the exceptional circumstances faced by the contracting sector and the severe imbalance in contractual balance, and considering the oppressive practices now being imposed on contracting companies in many contracts, particularly: the refusal of some purchasing entities to fix the exchange rate, non-compliance with the indexation mechanism, linking prices to reflect the economic reality and inflation, unjustified delays in approving and disbursing financial claims, and obstinacy in refusing to resort to arbitration as a fair alternative method for dispute resolution, contrary to the principles."