Karnataka Contractors Seek Release of ₹38,000 Crore Pending Dues, Urge Shivakumar to Honour Payment Assurance

In a letter to the Chief Minister, association president R. Manjunath recalled Shivakumar’s reported assurance on June 30 that outstanding contractor payments would be cleared within two months. The association has now sought immediate intervention, saying the promised timeline has passed without the issue being resolved. The contractors have also requested an emergency meeting with Shivakumar to discuss their grievances and seek a roadmap for clearing the pending payments.

The association has demanded greater transparency in the way funds are released by different government departments. It has also called for an end to the use of special Letters of Credit (LOCs) for releasing payments.

Among its other demands, the contractors have sought payment of the 8 per cent difference arising from GST and called for greater preference to local contractors while awarding government works in Karnataka. They have also urged the state government not to favour contractors from outside the state.

The issue of pending contractor bills has been raised repeatedly in Karnataka this year. In January, the contractors’ association had put the outstanding dues at around ₹38,000 crore and threatened protests and a work stoppage if payments were not released. The figure has also been cited by opposition leaders during discussions on the state government’s finances.

The association has separately pointed to the Public Works Department, headed by Minister Satish Jarkiholi, and said there was transparency in payments made through the department.

The contractors’ latest demand comes amid an ongoing Enforcement Directorate investigation involving premises linked to Jarkiholi and his associates. The ED said it conducted searches at 21 premises in Bengaluru, Belagavi, Gokak and Kolkata on September 9 and 10 under the Foreign Exchange Management Act in connection with alleged undisclosed overseas investments, cross-border business links and suspected financial irregularities. The agency said it seized ₹3.3 crore in cash, foreign currency worth around ₹15 lakh and documents during the searches.

The ED has also alleged that its searches uncovered material relating to suspected irregularities connected with Karnataka’s PWD contracts and alleged financial transactions involving contractors. These remain allegations under investigation and have not been established as findings of guilt.

The contractors’ association has now called on Shivakumar to convene the requested emergency meeting and take steps toward clearing the outstanding bills.