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Road scam: Mumbai civic body to pay road contractors in parts, keep security deposits

After holding payments of ₹900cr for 4 months, BMC will pay tainted contractors to complete pending works

mumbai Updated: Mar 22, 2017 10:30 IST
Chetna Yerunkar
BMC

Civic officials said the contractors delayed work on 281 roads, citing lack of funds and thus this decision has to be taken. (HT PHOTO)

After holding payments worth more than Rs908 crore to 16 contractors named in its two internal inquiries into the road scam for four months, the Brihanmumbai Municipal Corporation (BMC) will soon pay the contractors and recover its losses in a piecemeal manner.

The civic body has decided to keep with it the entire security deposits and performance guarantee amounts of the contractors amounting to Rs700 crore until the final outcome of the inquiry.

According to officials, in order to facilitate the completion of the ongoing road work before monsoon , the BMC will release partial payments to the contractors after the completion of every work and keep the remaining amount as recovery charge.

With the civic body having around Rs700 crore of the contractors in the form of various deposits, the civic body will now look at recovering the remaining Rs200 crore from the amount they pay the contractors. Currently, the amount to be recovered in a ‘piecemeal approach’ from each of the 16 contractors is yet to be calculated and the payments will be released soon, said officials.

Civic officials said the contractors delayed work on 281 roads, citing lack of funds and thus this decision has to be taken.

A senior civic official , explaining this move, said, “To ensure road works are completed before monsoon, we decided to pay the contractors, but only partially. For example, if a contractor’s Rs20crore worth payment is due for one particular road, but his work has incurred losses worth Rs10crore, we will only pay Rs15 crore and hold the remaining Rs5 crore as recovery charge. This will be continued until we recover whatever amount is due from him, while paying him for the work allotted to him.”

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