Contractors unhappy over BBMP withholding 5% of pending dues for defect liability

While expressing happiness over the release of the pending 25% dues pertaining to bills for the completed civic works, contractors working under the Bruhat Bengaluru Mahanagara Palike (BBMP) termed the decision to withhold 5% as security against any defect found by Justice H.N. Nagamohan Das’ committee as unfair.

While expressing happiness over the release of the pending 25% dues pertaining to bills for completed civic works, contractors working under the Bruhat Bengaluru Mahanagara Palike (BBMP) termed the decision to withhold 5% as security against any defect found by Justice H.N. Nagamohan Das’ Committee as unfair.

After coming to power, the Congress government halted all payments and formed four Special Investigation Teams (SIT) to probe allegations of corruption in connection to works carried out between 2021 and 2023. Meanwhile, the government also constituted the H.N. Nagamohan Das Committee to probe allegations of kickbacks for clearing bills across the State in various departments. The committee was also asked to probe BBMP works. After the contractors moved the court, the BBMP dissolved the SITs. Currently, only the Nagamohan Das committee is investigating the allegations. 

In September 2023, after the contractors demanded the release of bills, the Urban Development Department (UDD) issued an order directing the BBMP to clear 75% of the bills for the works completed between April 2021 and September 2021. Over a period of time, the BBMP cleared the bills of the works completed till March 2023. On Monday, the UDD issued a new order to clear the remaining 25% and make full payment for bills that were not cleared yet. 

K.T. Manjunath, president, BBMP Contractors’ Association, said, “We are happy that the government has finally relented and ordered clearing of pending dues. The contractors have been demanding the release of 25% for many months; and recently, we had stopped civic works. When we stopped, the BBMP assured us of talking to the State government to resolve the issue. But nothing had happened. However, when we again threatened to halt work, the UDD issued the order.” 

Mr. Manjunath said 5% is already taken during issuance of tender as cost of work (performance guarantee) for which the contractors do not have any qualms. But the UDD wants the BBMP to withhold another 5% as security against any defect found by Justice H.N. Nagamohan Das committee. “For many bills which were paid (up to 75%), the defect liability period has ended. Deducting 5% is unfair. Out of the 25%, the contractors will only get 15%,” he said, urging the Deputy Chief Minister and Bengaluru Development Minister D.K. Shivakumar to withdraw this caveat for clearing pending dues. 

A senior BBMP official said that as the Nagamohan Das committee is probing the matter, the BBMP has to keep 5% for defect liability. If any defect is found, then the BBMP contractors will be penalised, the official added.