80pc of construction corporations now bankrupt

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AT-KABUL: Some 80 per cent of the private construction companies are facing the threat of bankruptcy, the association of the construction companies said Wednesday.

It said that the government had long stopped giving projects to the construction companies and still owed millions of dollars to them of the previous projects.

“There are five hundred companies registered in the association, but only 20 per cent of them have projects. The rest are facing bankruptcy,” Mawdood Popal, head of the construction companies’ association said.

Popal called insecurity as the major element of the problem, saying that the government’s long delays in paying the companies’ money also affected their business.

The government owes 110 million dollars to private construction companies, according to Popal, who said that the companies needed to buy materials in increasing prices, while their moneys were held in government’s bureaucratic process.

The urban development ministry, the government’s organ mostly in touch with construction affairs, says the government was cooperating with the private sector in different fields.

“The companies that fail to receive projects, have capacity problems,” said Ajmal Shams, deputy urban development minister.

“I don’t think the government makes problems so the private companies cannot receive projects. The companies are incapable to receive projects.”

He said the government keeps some money of the companies because they did not do their projects well.

Motiullah Kharoti, a construction expert believes both the government and private companies were guilty. He added that the government now prioritizes transparency in giving projects, but the private companies lack enough capacity.