Vijayawada Municipal Corporation Halts Rs 80 Crore in New Development Projects
A severe financial crisis has gripped the Vijayawada Municipal Corporation (VMC), forcing the stalling of approximately Rs 80 crore worth of new development works across the city. This drastic measure stems from the civic body's inability to clear outstanding dues owed to contractors who executed various projects over the past two years, coupled with a critical shortage of municipal funds.
Contractors Demand Work Order Cancellations Amid Unpaid Bills
Contractors who secured letters of award for executing essential infrastructure projects have voluntarily approached the VMC, urging the cancellation of their work orders. These projects include the construction of roads, laying of underground drainage and drinking water pipelines, and electrical works. The contractors cite the corporation's persistent failure to settle outstanding payments as the primary reason for their unprecedented move.
Adibabu, president of the VMC Contractors Association, stated emphatically, "Except for works pertaining to the Summer Action Plan 2026 and ongoing development initiatives, no new works will be launched or undertaken by contractors until all outstanding dues are fully cleared." This declaration underscores the deepening rift between the civic administration and the contractor community.
Massive Dues and Financial Strain Revealed
According to detailed figures provided by the Contractors Association, the VMC owes a staggering Rs 163 crore in dues for various development works executed between August 2024 and March 2026. In a partial effort to address this mounting debt, the civic body cleared Rs 20 crore last month and has pledged to settle an additional Rs 40 crore by the end of April through bank loans. If fulfilled, this would reduce the total outstanding dues to Rs 103 crore.
However, the financial woes appear even more extensive. The Contractors Association leader revealed that the VMC likely owes an additional Rs 100 crore in bill dues. This includes Rs 50 crore for works already completed under various projects and another Rs 50 crore for ongoing works nearing completion in the city. The situation has been exacerbated since January 1, 2026, when the civic body ceased processing bill payments following the implementation of the NIDHI portal, which replaced the CFMS system for contractors.
Municipal Response and Proposed Solutions
When contacted regarding the escalating crisis, NTR district collector and VMC special officer Dr. G. Lakshmisha acknowledged the severity of the issue. He confirmed that the civic body is actively exploring avenues to clear the pending bills. "The corporation has initiated the process of securing a government guarantee to raise bank loans, aiming to clear the outstanding dues at the earliest possible opportunity," Dr. Lakshmisha explained.
This financial impasse has not only halted new development but also threatens to undermine public infrastructure projects critical to Vijayawada's growth. The stalling of Rs 80 crore in works highlights the urgent need for sustainable fiscal management and timely disbursement of funds to ensure the continuity of essential civic services and urban development initiatives.
