<p>Bengaluru: The Siddaramaiah administration, seeking to mollify contractors angry over huge pending bills, has devised a system to automatically release earnest money deposits (EMD) to unsuccessful bidders for public tenders. </p>.<p>EMD is a refundable security amount, usually 1-5% of the project cost, paid by bidders to show that they are serious about taking up a work for which tenders are floated. </p>.<p>The Karnataka State Contractors' Association (KSCA) has slammed the government for not refunding EMDs for years.</p>.Govt restores original IRR plan with minor changes in Bengaluru.<p>The e-governance department, which reports to Chief Minister Siddaramaiah, has proposed an auto-release system for EMDs, which a top official said would benefit contractors. </p>.<p>"In any tender, a large number of bidders participate. They have to pay an EMD. This EMD is refunded to unsuccessful bidders," principal secretary (e-governance) Pankaj Kumar Pandey said. </p>.<p>Pandey pointed out that contractors, or agencies, would have applied for multiple tenders at a time. "Their money, in the form of EMD, will be stuck," he said. </p>.<p>“Currently, EMD is released only after the letter of intent is given to the lowest bidder, or L1, which takes some time,” Pandey said.</p>.<p>A letter of intent is a document issued by the procuring entity (a government department that has floated the tender) to the successful bidder, stating its intention to award the contract. </p>.<p>“Under the auto-release system, the EMD will be refunded after the declaration of the lowest bidder (L1), unless there’s a court case or litigation,” Pandey said. "That way, it’ll simplify the procedure and help contractors".</p>.<p>The proposal to introduce the auto-release system was discussed at a review meeting Siddaramaiah had with top secretaries last week. </p>.<p>"Thousands of crores of rupees in EMD is with the government," KSCA president R Manjunath said.</p>.Karnataka govt sets rule to streamline litigation.<p>His estimate is that Rs 1,500 crore in fixed security deposit (FSD) and EMD is lying with the government. </p>.<p>"The government should release the EMD after two lowest bidders are finalised," he insisted. </p>.<p>So far in 2026, various government departments and agencies have floated 19,303 tenders worth Rs 25,846 crore, according to the Karnataka progress portal. The KSCA, whose kickback allegations against the previous BJP government dented the saffron party’s prospects in the 2023 elections, is on the warpath against the present Congress government. </p>.<p>The association has charged that the kickbacks had increased under the Congress government and pending bills have swelled to Rs 37,370 crore. </p>
<p>Bengaluru: The Siddaramaiah administration, seeking to mollify contractors angry over huge pending bills, has devised a system to automatically release earnest money deposits (EMD) to unsuccessful bidders for public tenders. </p>.<p>EMD is a refundable security amount, usually 1-5% of the project cost, paid by bidders to show that they are serious about taking up a work for which tenders are floated. </p>.<p>The Karnataka State Contractors' Association (KSCA) has slammed the government for not refunding EMDs for years.</p>.Govt restores original IRR plan with minor changes in Bengaluru.<p>The e-governance department, which reports to Chief Minister Siddaramaiah, has proposed an auto-release system for EMDs, which a top official said would benefit contractors. </p>.<p>"In any tender, a large number of bidders participate. They have to pay an EMD. This EMD is refunded to unsuccessful bidders," principal secretary (e-governance) Pankaj Kumar Pandey said. </p>.<p>Pandey pointed out that contractors, or agencies, would have applied for multiple tenders at a time. "Their money, in the form of EMD, will be stuck," he said. </p>.<p>“Currently, EMD is released only after the letter of intent is given to the lowest bidder, or L1, which takes some time,” Pandey said.</p>.<p>A letter of intent is a document issued by the procuring entity (a government department that has floated the tender) to the successful bidder, stating its intention to award the contract. </p>.<p>“Under the auto-release system, the EMD will be refunded after the declaration of the lowest bidder (L1), unless there’s a court case or litigation,” Pandey said. "That way, it’ll simplify the procedure and help contractors".</p>.<p>The proposal to introduce the auto-release system was discussed at a review meeting Siddaramaiah had with top secretaries last week. </p>.<p>"Thousands of crores of rupees in EMD is with the government," KSCA president R Manjunath said.</p>.Karnataka govt sets rule to streamline litigation.<p>His estimate is that Rs 1,500 crore in fixed security deposit (FSD) and EMD is lying with the government. </p>.<p>"The government should release the EMD after two lowest bidders are finalised," he insisted. </p>.<p>So far in 2026, various government departments and agencies have floated 19,303 tenders worth Rs 25,846 crore, according to the Karnataka progress portal. The KSCA, whose kickback allegations against the previous BJP government dented the saffron party’s prospects in the 2023 elections, is on the warpath against the present Congress government. </p>.<p>The association has charged that the kickbacks had increased under the Congress government and pending bills have swelled to Rs 37,370 crore. </p>
