Karnataka considers changing tender rules amid Rs 38,000 crore payment backlog
Contractors have demanded that the state government settle outstanding bills before starting any new infrastructure projects.
The Karnataka government is considering changes to tender eligibility norms as the state faces a reported Rs 38,000 crore backlog in payments to contractors, according to a report by Urban Acres.
During a meeting with the Karnataka State Contractors’ Association, Chief Minister DK Shivakumar stated that some of the group's demands had been agreed to, though specific details were not disclosed.
The association requested that the government settle pending bills, provide transparent payment schedules, and stop inviting tenders for projects that lack budgetary allocation.
Chief Minister Shivakumar said the current situation was caused by previous BJP governments under former chief ministers BS Yediyurappa and Basavaraj Bommai, who initiated many works without providing funds.
The association also alleged that approximately 70 per cent of legislators interfere in the tendering process and called for the end of the package system to support small and medium contractors.
To address the crisis, the Chief Minister has directed the finance department, financial adviser LK Atheeq, and Additional Chief Secretary Tushar Giri Nath to work on a resolution.
The government has agreed to pay Public Works Department and Greater Bengaluru Authority bills based on seniority and is looking into extending this to other departments.