The Karnataka state government faces mounting pressure to settle unpaid bills totalling approximately Rs 31,000 crore to contractors who have executed various public works across multiple departments, including Water Resources, Public Works, Minor Irrigation, and Urban Development. The Water Resources and Public Works Departments owe the bulk of these outstanding payments, which account for more than Rs 20,823 crore of the total dues.
According to government sources, the Water Resources Department alone is responsible for Rs 12,069 crore in unpaid bills, while the Public Works Department owes Rs 8,754 crore to contractors. Other departments, such as Minor Irrigation and Urban Development (excluding the Bruhat Bengaluru Mahanagara Palike, or BBMP), have outstanding bills of Rs 1,800 crore and Rs 3,800 crore, respectively. Additionally, the BBMP itself owes around Rs 3,000 crore.
The Water Resources Department has seen particularly significant delays in payments, with large sums still outstanding for works implemented by corporations under its jurisdiction, including Krishna Bhagya Jal Nigam (KBJNL), Karnataka Neeravari Nigam Limited (KNNL), Cauvery Neeravari Nigam Limited (CNNL), and Visvesvaraya Jala Nigam Limited (VJNL). Sources within the department indicate that while Rs 12,206.56 crore has been paid for 10,098 works over the past year, a substantial Rs 12,069 crore remains unpaid.
This backlog of unpaid bills is not new and has persisted across successive governments. The total outstanding amount has increased significantly, with previous years’ dues carried forward into the current financial year. Despite allocations made in the state budget for 2024-25, including Rs 9,987 crore earmarked for capital expenditure and other accounts within the Water Resources Department, the funds available have been insufficient to cover all pending payments.
The Public Works Department is also grappling with similar issues. With Rs 9,150 crores allocated across 49 different accounting heads for 2023-24 and Rs 9,200 crores provided for the current year, a substantial portion of the budget has been directed towards road development projects under the Karnataka State Highways Improvement Project (KSHIP). These projects are funded through loans from the Asian Development Bank and the World Bank, and significant amounts are required for loan repayment.
In particular, the southern zone of the state, which includes districts like Mysuru, Hassan, and Kolar, has seen a delay in payments for work completed as far back as October 2022. Meanwhile, in the northern, northeastern, and central zones, payments have been made for contractor bills up to January 2023. The department has adopted a payment strategy where 80 per cent of available funds are used to settle bills based on seniority, while 20 per cent are allocated for urgent needs.
The State Contractors Association, led by President D. Kempanna, has expressed concerns over the payment delays and plans to meet with Chief Minister Siddaramaiah to discuss potential solutions. The newly appointed Additional Chief Secretary of the Water Resources Department, Gaurav Gupta, stated that he is still gathering information regarding the pending bills.
This situation has sparked widespread concern among contractors and other stakeholders, who are eager for the state government to address the issue promptly and prevent further financial strain on those involved in public works projects.
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