<p>The state government has permitted the BBMP to obtain a bank loan of Rs 400 crore to clear its dues to contractors waiting for up to two years for payment.</p>.<p>The Bruhat Bengaluru Mahanagara Palike (BBMP) has come up with a novel scheme that allows the contractor to receive payment earlier by paying a bank interest rate. The Palike currently owes Rs 2,782 crore to contractors for work done in the years 2020-2021, 2021-2022, and 2022-2023.</p>.<p>DH was the first to report the civic body’s new proposal in a report published on September 5, titled ‘Cash-strapped BBMP banks on new plan to clear bills’. The state government’s consent will allow the BBMP to expedite the process of selecting the bank to roll out the scheme.</p>.<p><strong>Also Read |<a href="https://www.deccanherald.com/city/top-bengaluru-stories/increasing-wards-to-cost-rs-97-crore-on-staff-salary-bbmp-estimates-1188638.html" target="_blank"> Increasing wards to cost Rs 97 crore on staff salary: BBMP estimates</a></strong></p>.<p>The Urban Development Department (UDD) has issued an order instructing the BBMP to create a transparent mechanism by making the list of contractors who opted for the scheme available in the public domain. Payments will be cleared based on the seniority list.</p>.<p>According to the scheme, contractors can get the payment early by paying a certain interest to the bank upfront. The scheme will particularly benefit those who borrowed or took financial help from third parties to implement the work.</p>.<p>The BBMP has not been serious about timely payments to contractors due to overspending. This has led to a two-year delay in payments, which has also impacted the quality of work as contractors reduce their expenses to make a profit.</p>
<p>The state government has permitted the BBMP to obtain a bank loan of Rs 400 crore to clear its dues to contractors waiting for up to two years for payment.</p>.<p>The Bruhat Bengaluru Mahanagara Palike (BBMP) has come up with a novel scheme that allows the contractor to receive payment earlier by paying a bank interest rate. The Palike currently owes Rs 2,782 crore to contractors for work done in the years 2020-2021, 2021-2022, and 2022-2023.</p>.<p>DH was the first to report the civic body’s new proposal in a report published on September 5, titled ‘Cash-strapped BBMP banks on new plan to clear bills’. The state government’s consent will allow the BBMP to expedite the process of selecting the bank to roll out the scheme.</p>.<p><strong>Also Read |<a href="https://www.deccanherald.com/city/top-bengaluru-stories/increasing-wards-to-cost-rs-97-crore-on-staff-salary-bbmp-estimates-1188638.html" target="_blank"> Increasing wards to cost Rs 97 crore on staff salary: BBMP estimates</a></strong></p>.<p>The Urban Development Department (UDD) has issued an order instructing the BBMP to create a transparent mechanism by making the list of contractors who opted for the scheme available in the public domain. Payments will be cleared based on the seniority list.</p>.<p>According to the scheme, contractors can get the payment early by paying a certain interest to the bank upfront. The scheme will particularly benefit those who borrowed or took financial help from third parties to implement the work.</p>.<p>The BBMP has not been serious about timely payments to contractors due to overspending. This has led to a two-year delay in payments, which has also impacted the quality of work as contractors reduce their expenses to make a profit.</p>