Karnataka contractors seek ₹38,000 crore in dues; CM Shivakumar says valid demands will be addressed

The Karnataka State Contractors’ Association has urged the State government to clear nearly ₹38,000 crore in pending payments for development works, saying the dues have affected about 1.5 lakh contractors and their dependents. The association submitted a representation to Chief Minister D.K. Shivakumar on Monday.

Responding to presspersons, Mr. Shivakumar said the government was working to bring the situation under control. “There is an outstanding payment of around ₹38,000 crore. They have asked us to settle that amount. Over the last six months, work has been carried out and pending dues have accumulated. Now, we are bringing things under control,” he said.

He said the government was holding discussions with officials of Bescom, KPTCL and the Energy Department. “We have accepted their valid demands and will resolve the issues appropriately,” Mr. Shivakumar said.

The association said bills for works executed since 2021-22 remained unpaid across departments, and that the outstanding amount was spread across various development departments. It alleged a lack of transparency in tendering and payment processes in several departments. According to the association, the dues relate to works that have already been executed and are awaiting settlement.

Association president R. Manjunath recalled the assurances given during a contractors’ protest at Freedom Park on March 6, 2026, when Mr. Shivakumar was Deputy Chief Minister. According to the association, he had promised to clear the dues in a single instalment. At a subsequent meeting on June 30, after he became Chief Minister, Mr. Shivakumar again assured the association that payments would be released within two months, it said.

The association urged the government to stop inviting tenders for works without budgetary allocation and to take up fresh development works only after clearing existing dues. It also sought release of payments based on seniority, an end to preferential releases through special Letters of Credit, and scrapping of the package system, which it said disadvantaged small and medium contractors.

Other demands include extending the eligibility period for work experience and turnover requirements to 10 years; releasing the 8% VAT-GST differential for 2017-18 and 2018-19; and clearing pending bills of Jal Jeevan Mission contractors. The association also sought release of 25% of payments withheld for KRIDL works under the Greater Bengaluru Authority and a review of alleged irregularities in the Forest Department’s award of works under Section 13(B).

The issues raised by the association span several departments and agencies, including energy utilities, water supply programmes, and urban development and forest works. The representation lists both immediate payment demands and procedural changes. The association said the pending payments cover a range of works and have a bearing on the contractors who executed them.

The Chief Minister’s response indicated that the government has accepted some demands as valid, while discussions on the remaining issues are expected to continue. The association has sought a clear and transparent process for releasing payments, including priority based on seniority and an end to special arrangements that it says create unequal treatment among contractors. The Chief Minister did not specify the amount to be released immediately or a department-wise payment plan in his remarks to presspersons.