Donors threaten to cut development funds for projects run by Fayyad

Saleh Naami , Saturday 16 Apr 2011

Accused of short-changing contractors, several donor states are reconsidering how they fund development projects overseen by Palestinian Prime Minister Salam Fayyad

An independent Palestinian website reported that donor states threatened Salam Fayyad’s government in Ramallah to not fund development projects. This came after Palestinian contractors complained the government was not paying its dues to companies executing some of the projects.

The Palestinian Contractors Union, according to Quds Net, filed an official complaint concerning the issue to the donor state’s coordination office. The website also indicated that Fayyad’s government has accumulated piles of debts by not paying its dues to companies executing development projects in the West Bank, which irked donors.

The donor states threatened to cut off funding, which goes through the Ministry of Finance governed by Fayyad himself, and to seek a more transparent mechanism to support the development projects.

The donor countries reportedly created a new mechanism by which to fund projects through opening accounts specific to them whereby money can be transferred away from the Ministry of Finance. The ministry’s role would be restricted to approving tax bills, the website reported.

Salam Fayyad’s government initiated several projects and establishments around a year ago, claiming they would represent the nucleus of a future Palestinian state.

In a similar context, Gaza’s electricity company accused Ramallah of not transferring money earmarked by donor states for buying fuel necessary to run the Strip's only power plant.

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