BBMP struggles to clear huge outstanding bills worth Rs 3,228 crore

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As the Bruhat Bengaluru Mahanagara Palike (BBMP) clears outstanding bills from September 2019, it still has dues worth Rs 3,228 crore.

The large amount has accumulated over the years as the civic body announced several minor works beyond its annual revenue. Senior officers are now working on a fiscal discipline policy to check unnecessary announcements.

Documents show that despite owing contractors Rs 3,228 crore for the works executed two years ago, the Palike has Rs 4,605 crore to complete under-construction works whose escalating costs have not yet been budgeted. These expenses have become a liability for the civic body.

Delayed payments has its repercussions as contractors compromise quality of work to keep a huge margin to make up for the late payments. Senior officials say they are unable to re-verify the work at the time of payment, indicating the works are minor in nature and do not have a lasting impact.

K T Manjunath, president, BBMP Contractors Association, said long delays have nearly 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 made genuine efforts to clear old bills. “We have released Rs 1,400 crore only to clear pending bills this year. This is the highest such allocation in the BBMP’s history. Despite this, contractors are unhappy. In the past, only about Rs 800 crore to Rs 1,100 crore a year was released to clear pending bills,” said Tulasi Maddineni, BBMP’s Special Commissioner (Finance).

Senior officials said they are trying to strike a balance between the city’s development and clearing old bills. “We have been pruning expenditure and increasing revenue to reduce the accumulated bills. We have not sanctioned too many works keeping in mind the budgetary constraints,” said BBMP Chief Commissioner Gaurav Gupta.

To ensure financial discipline, Gupta said they have proposed a new policy to ensure all projects are conceived keeping in mind the actual revenue.