BENGALURU: Days after contractors threatened to stop all work over pending dues, the Bruhat Bengaluru Mahanagara Palike (BBMP) is now seeking nod from the state government to borrow Rs 700 crore loans from banks to clear the outstanding.
Earlier, BBMP officials had mortgaged many its historical buildings and borrowed loans in the name of development. The present government had cleared the loans and warned the Palike against such huge borrowings. Despite this, the civic body has now submitted a proposal to borrow loans from banks.
Over the last few years, the Palike has executed thousands of projects, but its coffers are empty. With its contractors threatening to stop all work, it is now hoping to get loans and clear their dues.
If the BBMP does not to pay up the dues by the end of this month, then all the construction works of the Palike will be stopped. The contractors had set a deadline and BBMP Chief Commissioner Tushar Giri Nath had also discussed this with the Chief Minister. The BBMP officials have proposed to the government that at least some of the bills should be paid.
Tushar Giri Nath said, “Our target is not to exceed 24 months for payments. Now, the financial condition of the BBMP is under control as revenue collection has increased. The BBMP’s Finance Department has given its approval to borrow loans, which are to be repaid within six months. If we get the government’s nod, we can clear the bills of contractors. If any bills are pending after six months, we will pay to the bank escrow account and contractors can get it cleared from there. We are clearing Rs 300 crore in dues by March. Once the government gives approval, we will open the escrow account with a bank for further procedure”.
“This time, we will not mortgage any property to get loans, instead the Palike will open an escrow account. The money will transferred directly to the contractors from the account. The interest rate for the loan will be lower such an account”, the Chief Commissioner added. He claimed that the government has given the green signal to the first part of the proposal.