Cash-starved BBMP falters on payments

The Bruhat Bangalore Mahanagara Palike (BBMP) was cut off from the rest of world in December 2013 as its broadband connection was disconnected, for failing to pay dues of Rs 12 lakh to the telecom service provider.

An official termed it “the BBMP’s dark age.” Many of its online projects were affected due to the disconnection, said the official. The Palike somehow managed to send press notes through data cards.

A semi-government body, with an annual outlay of Rs 10,000 crore, has thus failed to foot a bill of Rs 12 lakh, but stories of the Palike's cash-starved state do not stop there.

Last month, the Palike had issued a cheque for Rs 400 to a vernacular weekly, which was dishonoured. It is learnt that the Palike had agreed to pay Rs 10 lakh through cheque to the Karnataka Athletic Association, which also bounced. The amount was supposed to be the Palike’s contribution to a junior-level national athletic championship.

A senior Palike official said several cheques issued by the BBMP were being dishonoured. Palike officials were requesting recipients of the cheques to deposit them only if they were told that there was enough balance in the Palike’s bank account.

BBMP Commissioner M Lakshminarayana said though the financial position was not sound, it was not as bad as projected. Lakshminarayana said: “It is true that the cheque for Rs 10 lakh given as the Palike’s share to the smooth conduct of national junior-level athletic championship was dishonoured. However, it is not correct to say that everyday cheques are getting dishonoured.”

Jayamahal corporator M K Gunashekar attributed the situation to an unrealistic budget and the previous government’s decision to expand the Palike’s limit from 225 sq km to 800 sq km, besides financial indiscipline.

 A senior Palike official said: “While the revenue remained nil, the Palike spent thousands of crores of rupees. As a result, its total outstanding bill is about Rs 5,200 crore.”

The Palike was left with no other option but mortgage its properties to tide over the financial mess. After mortgaging  Public Utility Building and K R Market, the Palike has decided to mortgage Johnson and Russel markets.