Bangalore: The Karnataka state government is under increasing pressure to resolve unpaid bills totaling approximately Rs 31,000 crore owed to contractors who have completed various public works across multiple departments. The most significant portion of these outstanding payments is tied to the Water Resources and Public Works Departments, which collectively owe more than Rs 20,823 crore.
According to government sources, the Water Resources Department is responsible for Rs 12,069 crore in unpaid bills, while the Public Works Department has an outstanding amount of Rs 8,754 crore. Additional departments, such as Minor Irrigation and Urban Development (excluding the Bruhat Bengaluru Mahanagara Palike, or BBMP), have pending bills amounting to Rs 1,800 crore and Rs 3,800 crore, respectively. The BBMP itself owes around Rs 3,000 crore.
The delays in payment are particularly acute within the Water Resources Department, where substantial sums remain unpaid for projects executed 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). Despite Rs 12,206.56 crore being paid for 10,098 projects over the past year, an additional Rs 12,069 crore remains outstanding.
This backlog of unpaid bills is a long-standing issue that has persisted across multiple administrations, with the total amount increasing as previous years' dues are carried forward. Although the state budget for 2024-25 allocated Rs 9,987 crore for capital expenditure and other accounts within the Water Resources Department, the available funds have proven insufficient to cover all outstanding payments.
The Public Works Department is facing similar challenges. With Rs 9,150 crore allocated across 49 different accounting heads for 2023-24 and Rs 9,200 crore provided for the current year, much of the budget has been directed towards road development projects under the Karnataka State Highways Improvement Project (KSHIP). These projects are funded by loans from the Asian Development Bank and the World Bank, which also require significant amounts for loan repayment.
The southern zone of the state, including districts like Mysuru, Hassan, and Kolar, has seen delays in payments for work completed as far back as October 2022. Meanwhile, in the northern, northeastern, and central zones, contractor bills have been settled up to January 2023. The department has adopted a payment strategy where 80 percent of available funds are used to settle bills based on seniority, while 20 percent are allocated for urgent needs.
The State Contractors Association, led by President D. Kempanna, has voiced concerns over the delays and plans to meet with Chief Minister Siddaramaiah to discuss potential solutions. Gaurav Gupta, the newly appointed Additional Chief Secretary of the Water Resources Department, has stated that he is still gathering information regarding the pending bills.
The ongoing situation has sparked widespread concern among contractors and other stakeholders, who are urging the state government to address the issue promptly to prevent further financial strain on those involved in public works projects.
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