BBMP contractors refuse to take up Rs 465-crore works

The Bruhat Bengaluru Mahanagara Palike’s (BBMP) poor track record in clearing dues and ‘financial mismanagement’ has discouraged contractors from taking up ward level works worth Rs 465 crore in the current financial year.

The contractors have found that works under the state government’s Nagarotthana scheme implented through Public Works Department are more lucrative than those of the BBMP, since payments are made almost instantly under the former.

The Palike had decided to take up 2,401 works this fiscal but more than 90% of them haven’t taken off yet. The Palike administration is worried as only two months are left for the financial year to end. From April 1, 2017 the works may either be scrapped or carried forward to the financial year 2017-18.

According to BBMP sources, Mayor G Padmavathi had directed officials to start the tender process in November 2016 as a delay would have hit the works.

Subsequently, the BBMP’s Wardwise Works Committee chairman B Bhadregowda had announced single-window clearances to all the 2,401 works in just 24 hours and directed that tenders be floated for these works in one go. On November 16, short term tenders were called for these works. But there was cold response from the contractors.

“Barring a few areas such as Gandhinagar, Dharmarayaswamy Temple ward, Yelahanka and Byatarayanapura, contractors didn’t participate in tender for works in other areas,” said a Palike official requesting anonymity.

BBMP Taxation and Finance Committee chairperson M K Gunashekar said most of the contractors these days prefer projects under the Nagarotthana scheme because payments are quick. “Bills are pending for the last three years in BBMP. Contractors are carrying out works by spending from their pocket. Who can afford to lock their money for such a long period?” asks Gunashekar.

BBMP commissioner N Manjunatha Prasad conceded that the response to tenders was poor as contractors shy away from taking up Palike’s projects. He blamed the previous regimes in the BBMP, which presented highly inflated budget. “There will be serious imbalance if the income is Rs 1,000 crore and the budget is of Rs 4,000 crore. Thus, works of Rs 1,000 crore only can be taken up and rest of the Rs 3,000 crore will go as pending bills, which is a huge financial burden on the BBMP,” explained Prasad.

The commissioner emphasised upon presenting a realistic budget to minimise the financial burden on the Palike. Presently, there are bills worth Rs 2,000 crore pending for the last two years, he added.

BBMP Contractors’ Association general secretary G M Ravindra found no merit in bidding for BBMP contracts. “We have not got our bill payments for the past 25 months. Our cash is locked. In this scenario who would bid for contracts?”
DH News Service

It all began in 2008
Financial mismanagement in the BBMP started in 2006 when the civic body’s municipal jurisdiction was expanded from 225 sqkm to about 800 sqkm. An unrealistic budget, where the expenditure was four times the receipts, kept increasing spillover works. The Palike was even forced to mortage its historic properties to clear the bills. Then came the ‘work code scam’ where big contractors bagged contracts, got the work code and sat on projects for years: neither they executed the work themselves nor allowed others to take them up.  In 2011, ‘fake bill scam’ of Rs 1,538 crore surfaced. It affected not just the BBMP but also various other civic agencies.

For the same works, which were never executed, bills were submitted to the BWSSB and the BDA too.

Soon, the BBMP was hit by the ‘seniority scam’ where the mighty contractors threatened and bribed Palike officials to get their bills cleared first ahead many others. These practices dented the Palike’s image and petty contractors stayed away from the civic agency.

Works may be entrusted to KRIDL
The BBMP is contemplating to hand over 2,401 works worth Rs 465 crore to Karnataka Rural Infrastructure Development Limited (KRIDL), which many in Palike term as a ‘hub of corruption.’ Sources in the Palike said that since no contractor is coming forward, the BBMP administration has made up its mind to get the works executed through KRIDL. A subsidiary of the state government, KRIDL levies service charge of 11% on the cost of the project. If the tenders are floated, then contractors may bid at least 15% to 20% less than the cost of the project, Palike sources say.