The Office of the President-elect has stated that the Economic Council does not have the authority to grant extensions to contracts signed under the Public Sector Investor Programme (PSIP). The statement was made after the Economic Council made the decision to extend the contracts for the ongoing PSIP projects signed before May 30, 2020.
The Ministry of Finance stated that the decision was made to ease the difficulties faced by contractors during the COVID-19 pandemic. The contractors are required to request an extension for a period not exceeding six months.
At a press conference, Spokesperson Mohamed Firuzul expressed concern that the Economic Council made the decision that does not fall under its mandate. He detailed the powers of the Economic Council in relation to development projects are to formulate and implement the government policies and to supervise and take necessary measures to resolve the issues encountered during the implementation of the development projects.
Additionally, Firuzul said that the finance ministry does not have the authority to grant extensions to PSIP contracts, either. He also said that now is not the time to grant extensions, as it would interfere with the policies of the incoming government.
The Public Finance Act provides for certain procedures to be followed to extend the duration of PSIP projects. Section 10(h) of the act states that state funds can be used to assist a person or entity facing financial challenges in cases where the government considers it in the public interest or in circumstances where the government deems it just.