BEIRUT: The Finance Ministry promised Monday to pay the state’s outstanding debts to contractors in four installments before the end of this year.
The decision came after a meeting between caretaker Finance Minister Mohammed Safadi and a delegation from the contractors association headed by Fouad al-Khazen.
“We have agreed with the Finance Ministry to settle the outstanding dues in four installments before the end of this year. The ministry will give advance payments from the Treasury for projects that were allocated for the contractors in 2011 and 2012,” Khazen told reporters after the meeting.
He said this cash injection would help stimulate the Lebanese economy and allow contractors to pay their debts to the commercial banks.
Safadi said the ministry would respect all commitments despite the difficult economic conditions.
Last week, Khazen told The Daily Star that the Lebanese government owed contractors around $200 million for bills that had accumulated since 2011, warning 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,” Khazen said.
The association said public works contractors would shut down businesses and lay off workers if the payments were not released.
The caretaker Cabinet is not authorized by law to allocate money for new infrastructure projects.
But it is obliged by law to finance all projects that were approved before its resignation.