To fulfill Prime Minister Abdullah Ahmad Badawi's desire to reduce bureaucratic red tape, the government has announced that it will finally be paying up the RM2 billion it owes to private contractors and service providers before Hari Raya.

Second Finance Minister Jamaludin Jarjis.said a directive had been issued to all ministries last week.

"We have also issued a directive for all payments to be made within 30 days, like bills or invoices for November which have been submitted to the government," he was quoted by Bernama as saying.

Jamaludin explained that bureaucratic red tape and projects which exceeded their projected costs were among the factors behind the arrears in payment.

Can apply for extra

"If additional funds are required, the respective ministries should promptly apply to the Finance Ministry for more allocation to prevent arrears in payment from occurring," he said.

Jamaludin said this when asked to comment on the recent Abdullah directive that the Treasury to settle all payments due to government contractors and service providers before end of the year.

Within the first two weeks of coming into power, the prime minister vowed his commitment to fighting corruption and reducing red tape in the civil service.

To this end, he even announced the setting up of an email service, so the public can channel their grouses to him directly.

Later today, Abdullah told reporters that the Treasury had settled RM2.4 billion two days ago, with RM1.2 billion more to go.

He said this after chairing the National Finance Council and an Umno supreme council meeting at the Putra World Trade Centre in Kuala Lumpur.

He also said the 5.1 per cent chalked for the third quarter of this year signaled that the economy is doing well, especially since Bank Negara had recently hinted that the nation may exceed the 4.5 GDP growth for 2003.