Contractors’ association says it may move court to get outstanding amount of Rs. 6.32 crore

Contractors and workers of Bharati Shipyard Limited (BSL) in Tannirbavi are struggling to get “huge outstanding dues” for work done as the yard management has deferred payment or partially paid them in tranches over the last two years.

Deviprasad Shetty, president, Bharati Shipyard Contractors Association, said payments for seven months were pending to 32 contractors and 2,000 labourers. “For the last four days, no work is going on,” he said.

The association’s release said payment amount of Rs. 6.32 crore was outstanding since February 2013 and alleged officials were “misleading” them. The problem started in 2011. Contractors continued working based on management’s promises of payments and the yard sent vessels in 2012 and 2013. They struck work thrice in 2012 and in 2013.

Ram Mohan, Chief General Manager, BSL, who attributed the issue to its problems related to a global slowdown in the shipbuilding industry, said, “We have a liquidity crunch”. Foreign companies cancelled “a lot of orders” taking back advance amounts.

Debt rejig

A State Bank of India-led consortium of 26 banks, formed by the Finance Ministry, took over the corporate debt restructuring (CDR) of the company, controlling working capital, salaries and contractor payments.

He said, “The total outstanding is Rs. 4 crore to Rs. 5 crore, of which Rs. 1.85 crore was paid recently. We are not stopping there.”

Shanmuga Kani, General Manager, Commercial and Accounts, BSL, said the company lost Rs. 2,800 crore, leading to a working capital crunch. The CDR was trying to reduce its non-performing assets (NPAs) of Rs. 3,500 crore, which it was “unable to pay”.

The Mangalore yard is building five vessels — for Coast Guard, Defence Research and Development Organisation (DRDO) and Andaman and Nicobar Administration — he said.

Balakrishna C.H., Deputy Labour Commissioner, Hassan Region, Hassan, said he has asked the contractors to approach the Factories Department.

Devraj Fernandes, vice-president of the Contractors Association, said, “We are trapped in the system. We are neither able to get out nor stay on.”

The company’s stance that it would pay when it got money from clients was “indirect blackmail of contractors”. Raghavendra Rao, advocate and notary, legal adviser to the association, said ministers and officials were silent and contractors may move the court.

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