In the course of its state-building program, the Palestinian Authority has accumulated millions of dollars in debts owed to contractors, the union of Palestinian contractors said Sunday, urging officials to pay companies what they are owed.

"The union demands that the Palestinian government pays contractors in return for the projects they executed for the government. Huge debts have been accumulated since November 2010, and some contractors have overdrawn their bank accounts," said Adel Auda, union chief in the West Bank.

Auda said the PA Local Governance Ministry owed contractors over $10 million, while the Ministry of Public Works owed over 70 million shekels (around $19 million). Several other ministries also owed hundreds of millions of shekels, he added.

Over 450 contractors are registered with the union, and they provide employment for 22 percent of the Palestinian workforce, the union official said, adding that contractors were struggling to pay salaries.

"Eventually that will all have a negative impact on Prime Minister Salam Fayyad's plan to build state in two years," he said.

Auda said if the government did not pay its debts, the union would summon all contractors to a meeting and "all options will be open."

The PA has spent billions on projects for its two-year state-building program, with the aim of creating the infrastructure for a Palestinian state by the summer of 2011. Projects include expanding police networks and training, repairing road and sanitation infrastructure, building government and police centers in towns and cities, as well as expanding the school network.