Contractors doubt spending power of Telangana

Hyderabad: Going by the poor response to the mega tender notifications for the various irrigation and infrastructure projects, contractors appear to have doubts over the financial capacity of TS government. Due to this hesitancy, the TS government’s deadlines for completion of these projects are going awry.

Even after approving the cost escalation of ongoing irrigation projects, contractors are shying away from taking up works. There are also only a few takers for the 2BHK scheme tenders.

The government had issued orders in October 2015, approving cost escalation of irrigation projects and accordingly asked contractors to submit work estimates to take up works.

Later, cost escalation for 111 tender packages was approved and the government sought revised work estimates for 86 packages from contractors.
Five months on, the contractors came forward to take up only 12 packages.

Irrigation minister T. Harish Rao held a series of meetings with contractors asking them to take up works at the earliest, else the government would terminate their contracts.

Despite the warning, there has been no response from contractors.
“Though the government has spent Rs 5,500 crore on irrigation projects last year, bills worth Rs 900 crore are still pending. Contractors are facing financial problems due to delay in clearing the bills. The government has now planned new projects besides redesigning some existing ones. It needs to pay over Rs 1 lakh-crore to complete these projects in five years. However, the present financial condition means the government cannot clear such huge bills to contractors on time,” said a representative of Builders Association of India-TS branch, which primarily takes up major government contracts.

The government, which has decided to build 400 2BHK houses in each Assembly constituency this year, called tenders thrice.

Despite this, tenders found takers only in Warangal and Mahbubnagar districts.
Another contractor pointed out, “Such is the poor financial condition that the government recently paid Rs 300 crore to contractors of the Rs 430 crore paid to government by contractors towards EMD. EMD is the refundable amount paid by contractors while quoting for a tender. Already, huge money of contractors has got stuck in several projects due to delay in clearing of bills.”

A similar situation is being witnessed for contracts being awarded for Mission Kakatiya for restoration of lakes, Mission Bhagiratha (Water Grid) and Strategic Road Development Programme (SRDP) to build new multi-level flyovers, skyways etc in Hyderabad.