Taxpayers should not pay for this

The BBMP is set to cough up Rs 38 crore for reneging on its contractual obligation to some firms entrusted with the white-topping of roads.

This payment is to be made out of taxpayers’ money. In 2019, the BBMP decided to white-top 89 roads at a cost of Rs 1,154 crore, which was approved by the then JD(S)-Congress coalition government led by H D Kumaraswamy. After completing the tender process, BBMP issued acceptance letters to the winning bidders.

However, four contractors who had paid the bank guarantee and security deposit were not allowed to proceed with their part of the work, which accounted for about Rs 320 crore, as the ruling party changed and the BJP government of B S Yediyurappa took over.

Read | BBMP to white-top road where metro is awaited

The new government ordered a stop to white-topping, alleging irregularities in the project. The reasons for reneging on the contracts were political. It was alleged that those contracts had been awarded in the constituencies of non-BJP MLAs; there were also allegations of extraneous considerations behind the JD(S)-Congress government’s white-topping decision. These political reasons, especially being unproven allegations, are no reason for the government or the BBMP to renege on a contract.

It is another matter that the BJP government later went ahead with white-topping with a vengeance; or that months later, the Karnataka State Contractors’ Association complained to the Prime Minister that while they had had to pay 5-10% ‘commission’ to obtain contracts earlier, contractors were now being asked to pay 40% ‘commission’.

The BBMP, in response to a query from the Urban Development Department, has admitted that its action will lead to payment of damages as per the agreement signed with the four contractors. Strangely, though, the civic body has submitted figures to argue that the move will actually lead to substantial saving. The bureaucrats seem to be bending over backwards to defend a questionable decision as it was taken at the highest political level. If indeed the BBMP does go ahead with paying the Rs 38 crore, the amount should be recovered from the politicians who took the decision and the bureaucrats who implemented it. The taxpayer should not have to pay for it.

The issue raises the larger point of continuity in government and the sanctity of sovereign commitments. Contracts entered into by government bodies are sovereign commitments and must be honoured even if there is a change in the ruling party, unless corruption and irregularities are proven in such contracts. That’s a fundamental tenet and promise of the smooth transition of power – even if that be by engineered defections – in a democracy. Arbitrary decisions and cancellation of contracts is a negation of that promise and will result in loss of investor confidence in the State.