Cash strapped GHMC can’t pay for maintenance works

Cash strapped GHMC can’t pay for maintenance works

The financial uncertainty that the Greater Hyderabad Municipal Corporation (GHMC) has found itself in, may worsen further based on the plummeting revenues as indicated by the budget proposals for the financial year 2025-26.

The corporation is reeling under ₹6,130 crore outstanding borrowings as on October 1, 2024, show the proposals cleared by the standing committee. On the income front, the revised budgetary estimates for the current year have cut down the expected revenues by ₹1,781 crore - from the original estimate of ₹5,938 crore to the revised ₹4,157 crore.

Loan repayment component itself is pegged at ₹1,954 crore in the revised budget estimates for the financial year 2024-25, up from the actuals of 2023-24 at ₹1,007 crore and from the original budgetary estimates of 2024-25 at ₹1,664 crore.

The revised estimates include the interest payable on the amount accruing to the contractors for maintenance works. The budget proposals mention that since the financial year 2023-24, the contractors are being financed through TReDS, an online platform promoted by the Reserve Bank of India for MSMEs to unlock working capital by converting their receivables into cash. 

However, the contractors have to bear the interest burden on the finances availed through this platform, for which repayment will be made by GHMC in 180 days.

“More than ₹1,100 crore is pending from GHMC to the contractors, since the beginning of this year. They include even works carried out for Assembly elections at the end of the last year. Majority of us are small contractors and will not be able to generate working capital,” said general secretary of the GHMC Contractors Association, M. Surender Singh, alleging that Commissioner K. Ilambarithi is refusing to meet the association members despite repeated attempts.

Besides, the GHMC is not clearing amounts pertaining to constituency development programme, special development funds, and also the MP Local Area Development funds, months after the completion of works, and certification of the same, he alleged.