The Oman Society of Contractors (OSC) is calling on contractors, consultants and clients in the construction industry to adhere to the stipulations of their contracts in order to eliminate late payments.
Concerns have been raised by contractors about payments due to firms from the public as well as the private sector being delayed, at times, by months, causing difficulties to smaller companies.
Salim al Sheedi, CEO of OSC, said that the problem is well known within the industry, adding that if all parties stuck to the terms of the contracts then payments would be processed and the bills cleared.
He said, "There is not much we can do, because the relation between contractors, clients and consultants is very clear in the standard conditions of contract. If everybody adheres to it, things would go very smoothly.
"The OSC can ask stakeholders to adhere to the standard conditions of contracts."
A construction industry executive told Muscat Daily that late payments for contractors is 'endemic' within the industry.
"Late payments are a huge problem - it is endemic and a hot topic in the business. It is nothing new here and this is how it has been for many companies.
"However, the profit margins for contractors are very high here, thus building in risk to late payments.
"Besides, many contractors enter into back-to-back payments with their sub-contractors, and only pay when they are paid."
To help smooth out the process for contractors, Sheedi added that contractors should make sure any work they carry out is confirmed in writing instead of working on verbal instructions from consultants.
He said, "At the implementation stage of the project the client passes on the instructions to the consultant, who then passes the instructions on verbally, because putting it down in a written format would take too much time.
"What is suggested is that contractors, even though they receive a verbal instruction, they must write back to the consultant to say they are going to carry out what they have been asked to do, in order to safeguard themselves."
© Muscat Daily 2012
