Bageshree S.

It is blamed on lapse in procedure

Small, medium contractors are the worst-hit

Contractors to launch agitation from April 10

BANGALORE: As the financial year comes to a close, the Public Works Department (PWD) is tottering under the weight of unpaid bills to the tune of a whopping Rs. 720 crore.

This has the contractors in all 38 PWD divisions of Karnataka seriously worried, particularly because they are already in a financial tight spot on account of economic recession. It is another matter that the build-up in pending bills have been dogging successive Governments every year.

While there have been sporadic protests by contractors against pending bills in places such as Davangere, Belgaum and Bijapur, contractors from all over Karnataka are planning to launch a more unified agitation from April 10. “Works have been completed, but bills are not being cleared. To make matters worse, the department has stopped accepting bills on March 26, though the usual practice is to accept it till the end of the month,” D. Kempanna, general secretary of Karnataka Contractors Association, told The Hindu. He added that the worst hit are the medium and small contractors who have already had trouble raising resources to complete projects because economic recession has made loans harder to get now. The association will decide on the course of agitation in the executive committee meeting on Wednesday.

While bills remaining pending is in itself is not unprecedented, the amount is now alarmingly higher compared with the previous years. The pending bills for 2005-o6 was Rs. 250 crore and it was Rs. 120 crore for 2006-07.

Now, while bills to the tune of Rs. 420 crore are pending in the South Zone, which has its central office in Bangalore, the remaining are in North Zone, headquartered in Dharwad.

According to highly placed sources in the PWD, the piling up of bills is on account of a serious lapse in procedure in issuing Letters of Credit (LOC).

It is alleged that an official on deputation has been “usurping the role of the Secretary” and issuing Letter of Credits without seeking technical clearance, going against the rules.

“If grants are made systematically according allocation of work and their progress, this situation would not have risen,” said the source.

Mr. Kempanna alleges that clearing of LOCs has been done without a thought for the financial resources available with the department. “LOCs have been given randomly for a percentage and not on first-come, first-serve basis,” he said.