FM denies shortage of funds for public works

Thiruvananthapuram, Aug 10 (UNI) Brushing aside reports that adequate funds were not being released for public works, including maintenance of roads in Kerala, Finance Minister Thomas Issac today said Rs 506 crore had been released for various works in the last five months, the ''highest'' amount so far in the last four years.

''The reports are baseless. With the release of Rs 147 crore today, the total amount allotted to contractors would be Rs 506 crore this fiscal. While, it was Rs 405 crore in 2003-04, it was Rs 485 crore in 2004-05. The last financial year saw Rs 382 crore,'' he told reporters here.

Stating that the arrears to road contractors, which did not include the works in the pipeline, stood at Rs 710 crore, he said and it could not be estimated how much amount was needed for the works in pipeline. ''In total, the amount would be between Rs 700-1000 crore, which the state could not maintain from its other accounts,'' Mr Issac said.

In order to overcome this situation, the government proposed to arrange loans at a lower interest rate from some financial institutions to those contractors who were now paying heavy interest. As such, payment could be made to the new tenders as the work was completed, he added.

The government had also proposed to the contractors to pay as discount the interest due to them for the arrears they had to get, he said and added when a tender was signed, it was stipulated that no interest would be given to the contractors for the period they had to wait for the payment.

If the contractors' associations agree to this, it could be implemented and arrears could be given in time, he said. And if any contractor was not willing for this, he would get his payment according to the ''queue system''.

This proposal was really beneficial to the contractors who had to take loans in high interest, he said and noted that some were opposing this without any reason.

Moreover the e-tendering, which could make the whole process of tendering more transparent had also been opposed, he said. Some contractors and officials, who had some vested interest, were against this proposal, Mr Issac said. The government could not go along with the old system and changes should have to be brought in the whole system, he added.

He said the government proposed to increase the salary ceiling in order to give bonus benefits to more government employees. The salary advance for the employees would also be increased.

UNI