Over 4,600 contractors in Kerala have decided to boycott tenders from June 1 in protest against the delay in settling bills totalling Rs.2,500 crore.
The bills pending with the government include those for works executed for the Public Works Department and the Irrigation Department for a nine-month period from August last.
All Kerala Government Contractors’ Association general secretary P. Viswanathan said the contractors would boycott the tenders from June 1 as they could not take up new works or complete the works awarded to them.
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Of the Rs.2,500-crore arrears due for the August 2013-April 2014 period, 50 per cent was that for the road works. Banks were not giving overdraft, and C and D class contractors who took up works up to Rs.50 lakh were the worst affected, he said.
The association said funds were not earmarked in the State Budget for clearing the arrears. “The contractors are becoming prey to the unscientific financial management of the government,” he said.
The decision to collect purchase tax, along with the compounding fee, as per the Budget proposal was a big setback for the contractors, Mr. Viswanathan said. The association was also upset over the tax concessions provided by the government to major projects such as Kochi Metro.
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“The contractors will have to make purchases only from registered parties and will have to part with 7 per cent for tax from the 10 per cent profit,” he said.
Chief Minister Oommen Chandy should intervene to clear the arrears and avoid the boycott, he said.
Mr. Viswanathan warned that contractors would be forced to stop the works awarded to them if the bills were not settled.
When contacted, PWD Secretary T.O. Sooraj said the department owed only Rs.1,430 crore to contractors as on date. “We are taking steps to clear the arrears due to them in instalments and monthly basis. The pending bills of the PWD contractors for July 2013 were cleared this month,” he said.