BBMP requests grant for payment of contractors' bill

Bengaluru: As of now, the financial situation of Bruhat Bengaluru Mahanagara Palike (BBMP) has improved. All the debts obtained by mortgage of the properties have been repaid. However, a letter has been written seeking a grant from the state government to pay the bills to the contractor who have completed the work.

The works worth more than Rs 5,000 crore are currently in progress under BBMP. Apart from that, the amount of pending bills is Rs 3,000 crores and the amount of work to be carried out will cross Rs 5,000 crores. Overall BBMP has a liability of more than Rs 13,000 crores. Out of the ongoing works, 90% of the work is being carried out with state government grants. The rest of the work has to be paid by BBMP revenue department. Also, the state government itself has to pay the bill for the already completed works. Therefore, it has requested the government to provide a grant of Rs 750 crore to pay the bills to the contractors.

Most of the works that have been implemented and are being implemented under the BBMP are funded by the state government. Thus, every time the bill is paid, BBMP submits a request for a grant to the state government. Also, the state government spends at least Rs 3,000 crore every year to pay bills to contractors. It will also be given in 4 installments, this time Rs 750 crore has already been given in 3 installments each. BBMP has requested to give the last installment now. If the state government delays in giving the grant, there will be a delay in issuing the bill to the contractors.

Bills are currently paid on the basis of seniority in BBMP. Seniority of bills is determined based on which work was completed first, which contractor submitted the bills first. In addition to that, BBMP has also implemented a system of paying money only for the bills of 2 years ago. Thus the bills till the end of November 2020 have already been paid. The bills after December 2020 have to be paid now, amounting to Rs 3,000 crores. Also, BBMP is liable to pay bills of Rs 750 crore in the next two to three months. BBMP has sought government assistance for payment of outstanding bills and is also implementing a new system to pay bills to contractors. Accordingly, the contractor can get the work amount in the form of a loan by paying 2 years of interest to the banks. It is guaranteed by BBMP. Contractors who need urgent money can get the money for the work amount within 15 days under this system. This will eliminate waiting for 2 years for bill payment.

In this regard, a proposal has been submitted by BBMP to the state government, and if the government approves, the new system will be implemented from the next financial year.

A request has been made to the state government for payment of bills to contractors. A proposal has been submitted in this regard and the bill payment will be started again as soon as the government gives the money. In addition, it has been decided to implement a new system for paying the bills to the contractors and a proposal has been submitted to the government, said Jayaram Raipura, BBMP Special Commissioner (Finance).