CHENNAI: The city corporation’s pending dues to contractors have piled up to Rs 2,109 crore, a large part of which is owed to agencies handling solid waste management. With mandatory payments pending from the civic body since March, sanitary operations in the city may soon take a hit, as per sources.
A senior corporation official said that a meeting with the finance department was held on Wednesday, where the civic body sought special ways and means assistance.
In five months, the outstanding payments may increase by another Rs 2,800 crore, officials said, adding that Rs 2,000-crore assistance from the state government would help ease the situation.
Sources told TNIE that while pending dues are not new to the Chennai corporation, this time even mandatory payments for conservancy operations remain pending, with the contractors already struggling to pay salaries to their sanitary workers.
They said that for at least the first two months of this year, the mandatory 50% payment mentioned in the concessionaire agreement, apart from payments as per Key Performance Indicators (KPIs), was released, but from then until now, the GCC has allegedly not released funds even for mandatory payments.
Deputy Mayor M Magesh Kumaar told TNIE that the pending dues of over Rs 2,000 crore were for bills which have already been cleared.“ Additionally, ongoing works will amount to another Rs 1,500 crore.”
At its council meeting last month, the GCC said it would seek a Rs 300-crore overdraft facility to clear dues to contractors engaged in conservancy works. The government is yet to approve the request.
R Rama Rao, president of the GCC Contractors’ Association, said they usually approach RXIL, a TReDS platform, when bills cleared by the GCC remain unpaid. RXIL releases the amount after GCC approval, with the corporation required to repay it within three months, failing which interest is levied.
However, GCC has been unable to repay RXIL within the stipulated period and has stopped approving such requests, Rao alleged. Kumaar said delayed repayment would attract additional interest, which the corporation could not afford in its current financial position.
While the deputy mayor said the civic body owes Rs 500 crore to Urbaser Sumeet and Rs 250 crore to Ramky, its two SWM contractors, a senior corporation official said that the amount stood at Rs 303.19 crore for privatised conservancy.
It owes a total of Rs 723.58 crore for operation and maintenance and Rs 318.40 crore towards other expenses. The official added that the wage component is prioritised with regards to conservancy operations and is released periodically.