Chennai Civic Body Faces ₹770 Crore Payment Crisis, Halts New Projects
The Greater Chennai Corporation currently holds unpaid bills totaling nearly ₹770 crore for civic works completed months ago. This significant delay in payments has directly impacted the start of fresh infrastructure projects across the city.
Contractors Left Waiting as Payments Remain Stuck
Contractors working with the civic body report that bills have been passed and forwarded to the finance department. However, the Greater Chennai Corporation has failed to release payments for works finished six months ago. Officials cite a severe fund crunch as the primary reason for this hold-up.
R Ramarao, president of the Greater Chennai Contractors Association, stated clearly: "GCC owes contractors up to ₹770 crore for completed works under multiple schemes. Every time we ask for payment, they tell us there are no funds available."
Multiple Funding Schemes Affected by Payment Delays
The unpaid amounts cover works completed under several important schemes:
- Special Funds Scheme
- Nagarapura Salaimempattu Thittam (NSMT)
- KfW-funded projects
- Asian Development Bank (ADB) projects
- World Bank-funded initiatives
Under some foreign bank-funded schemes, the corporation has yet to release payments for its local component. This creates additional complications for contractors who have completed their work according to specifications.
Legal Action Becomes Necessary as Talks Fail
The Madras High Court recently directed GCC to pay ₹32 lakh as interest to Ramarao for delaying payment beyond the agreed 28-day period for a project completed under the KfW scheme. As per standard agreements, GCC must pay interest at 9% of the bill value if payment is not released within 28 days of bill approval.
"Even after receiving the court order, payment has not been released," Ramarao explained. "Many contractors are now preparing to approach the court directly, since repeated discussions have failed to produce results."
Contractors Describe Worst Payment Delay in a Decade
Another contractor, who chose to remain anonymous, revealed that several bills passed under the NSMT scheme have been pending since August. "In my ten years of taking GCC contracts, this represents the worst payment delay I have ever experienced," he said.
The contractor elaborated on the funding shift: "Earlier, works were primarily funded by state or central government schemes. This time, GCC introduced works under its own capital funds as well. The reality is simple - there is no money available with GCC or the government right now."
He added that approximately ₹110 crore remains stuck with TUFISL, further complicating the payment situation.
Specific Projects Left in Limbo
Contractors identified specific projects affected by the payment crisis:
- Construction of new roads across the city
- Development of modern parking lots
- Building of new flyovers to ease traffic congestion
- Creation of pedestrian plazas for public use
- Works worth ₹150 crore under the Vada Chennai Valarchi Thittam
While Greater Chennai Corporation Commissioner J Kumaragurubaran did not respond to specific queries about the payment delays, other officials privately admitted that the necessary funds simply do not exist at this time.
The payment backlog creates a ripple effect throughout Chennai's infrastructure development. Without contractors receiving payment for completed work, they cannot begin new projects. This stalls vital urban development and leaves citizens waiting for promised improvements to their city.
