Paraguay Congress fails to address contractor interest payments bill

A session in Paraguay's Chamber of Deputies was adjourned due to a lack of quorum, blocking the debate on a crucial bill that would authorize the payment of overdue interest to contractors of the Ministry of Public Works and Communications (MOPC).

The legislation, already approved by the Senate, aims to allow the MOPC to recognize and pay interest on outstanding obligations for infrastructure projects. The bill proposes an annual interest rate cap of 9.9% and stipulates that accepting this payment would mean contractors waive any further claims for interest or other related charges.

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I don't know if all companies will adopt this new law, because some have already registered amounts in their accounting according to the contracts.

Estimates from the construction sector indicate that the state's debt to contractors for completed works stands at approximately $200 million, with an additional $120 million accrued in interest. This situation has led to significant uncertainty among companies regarding the future application of the law, according to José Luis Heisecke, president of the Paraguayan Chamber of Construction (Capaco).

Heisecke noted that some companies have already recorded amounts according to their original contracts and may not accept the terms of the new law. He also highlighted that payment delays have been ongoing since the beginning of the year, with the sector awaiting a legislative solution. The bill also authorizes the issuance of public debt instruments to cover these payments, which would be exempt from all taxes.

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Since January, they have told us that the law will pass, but we are still waiting. There are companies that perhaps will not agree to join and will take another position.