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Forum Replies

Govt pays on time, takes steps to ease vendors' cash flow

01 Sep 2009

Mr Teo Kueh Liang in his letter "Government agencies should pay vendors promptly" (My Paper, 26 Aug 09) expressed dissatisfaction over Government's apparent tardiness in payments to suppliers and contractors after goods are supplied, and work certified to have been completed.

This is inaccurate. The Government has in fact been paying vendors promptly within the typical 30-day timeframe stipulated in the contracts. Such payments are made upon satisfactory receipt of goods/services and presentation of invoices. Presentation of invoices and processing of payment have been made even easier now with e-invoicing and Inter-Bank GIRO.

There are some projects like construction or Information Technology system development projects that have payments based on contracted milestones. In such cases, payments are aggregated based on milestone events even though some of the works may have been completed earlier. Again, each milestone payment would be done according to the payment terms stipulated in the contracts.

Further, in light of the economic downturn, the Ministry of Finance (MOF) had issued reminders to government agencies in January 2009 for government agencies to review payment milestones in their contracts to see if more frequent payments can be made to their suppliers for work done. We hope that such measures would help to ease the suppliers' cash flows.