Tema-Ghana, Nov. 3, MNN – “We are in very trying and difficult times; I can tell you that a lot of construction companies are folding up, or they have downsized the number of workers; at this time laying staff off is a very difficult decision to take, it is not easy for any employer.
“Workers are also asking for salary increments at the same time, the work itself is not there,” Mr. Simon Sawer Tetteh, Managing Director of Sawer-Nanor and Sons Company Limited (SNS) stated in an interview with Myliberty News Network (MNN) in Tema.
Giving statistical data to support the difficulties the Construction and Real Estate industry is going through, Mr. Tetteh explained that within a period of four months the price of building materials has increased astronomically.
He explained for instance the price of high tensile iron rods has moved systematically from GHs4,500.00 through GHs6,500.00, to GHs8,500.00 and now selling at about GHs11,500.00 within just a period of four months.
He added that the price of cement has also jumped from GHs50.00 to GHs80.00 and has now landed at GHs85.00 which may also change again anytime soon depending on the area it was being sold within the same period of four months.
The Sawer-Nanor MD said I can tell you that within a week, sand that we were buying at GHs1,800.00 moved to GHs2,500.00 and now GHs3,100.00 per 20 cubic truck.
He said chippings also increased over the period from GHs3,000.00 through GHs4,500.00 and currently selling at GHs5,500.00; “these are astronomical increments that you cannot keep as a contractor, it has a huge bearing on the cost of the project.”
“Indeed, the construction and real estate industry in the country is gradually collapsing; the effect of the economic meltdown on the industry is too much,” he said; stressing that most construction companies were either downsizing their workforce or shutting down completely as they could no longer cope with the repercussions of frequent and inconsistent price hikes.
“The construction industry is hit hard by the current economic hardship, so as business people either you are contemplating laying off some workers or trying to strategize to just break even or sometimes record a complete loss on a project,” he added.
Recently we checked our books and we realized that the variations alone are over 52 percent of the contract price you can imagine that if you are doing a project and such a huge percentage of cost has to be added.
He said looking at the huge difference in the cost of building materials which translates to more than 50 percent of additional cost in variations on a project, most of the works that they were handling had stalled as clients were unable to pay for certificates raised after works.
Mr. Tetteh indicated that the implication of that was job loss, and confusion between clients, workers, and contractors as it has become difficult to pay the salaries of workers as clients were yet to fulfil their payment requirements.
