As the Bruhat Bengaluru Mahanagara Palike (BBMP) settles the unpaid bills of September 2019, it still has dues worth Rs 3,228 crore.
The large amount has accrued over the years as the civic body announced several minor works beyond its annual revenue. Senior officers are currently working on a budget discipline policy to control unnecessary announcements.
Documents show that although it owes contractors Rs 3,228 crore for works carried out two years ago, the Palike has Rs 4,605 crore to complete works under construction whose rising costs have not yet been budgeted. These expenses have become a burden on the civic body.
Late payments have repercussions as contractors compromise the quality of work to retain a huge margin to make up for late payments. Senior officials say they are unable to double-check the works at the time of payment, saying the works are minor in nature and have no lasting impact.
KT Manjunath, president of the BBMP Contractors Association, said long delays have almost killed competition and only big contractors can survive late payments. “The BBMP has also started skipping the seniority list, which will open a floodgate of corruption,” he added.
Officials said the BBMP had made genuine efforts to clear old bills. “We released Rs 1,400 crore just to settle pending bills this year. This is the highest such allocation in BBMP history. Despite this, entrepreneurs are unhappy. In the past, only about Rs 800 crore to Rs 1,100 crore per annum was released to settle pending bills,” said Tulasi Maddineni, Special Commissioner of BBMP (Finance).
Senior officials said they were trying to strike a balance between developing the city and settling old bills. “We have reduced expenses and increased income to reduce accumulated bills. We have not sanctioned too much work keeping in mind budget constraints,” BBMP Chief Commissioner Gaurav Gupta said.
To ensure financial discipline, Gupta said they have come up with a new policy to ensure that all projects are designed with real income in mind.