Circled by creditors

In Srinagar, a copy of the circular has reached the office of the J&K Contractors Association, which boasts of a membership of 15,000 private contractors. Tasaduq Hussain, theassociation’s chairman, says their unpaid bills have mounted to Rs 6 crore and not a penny had been reimbursed since three months. “We will soon announce a state-wide strike. All the construction will come to a grinding halt,” he warns.

Hussain is surrounded by contractors from different districts, who complain bitterly about treatment meted to them at the treasuries when they have dared try and collect payments. Javed Ahmed, a road contractor from Baramulla, says he has bills for Rs 15 lakh pending and has withstood lathi charges and scuffles at treasuries. “The few cheques we have got from the Government have bounced. Now they have even barred us from entering the treasuries,” he says. “Work has virtually stopped everywhere. Without payments coming in, contractors like me are going to starve.”

The contractors spoke about another “phenomenon” they were experiencing. Any announcement for construction tenders was now accompanied with a rider. One, for instance, asked for tenders for constructionof foot-paths and parapets around the Dal Lake and had this `special note’ cyclostyled at the end: “The action execution of work on ground is subject to availability of funds. The Department shall not be responsible for any mobilisation etc. if any made by the tenderer…”

The plight of creditors in the Government sector is no better. Access to the finance bosses in the Central Secretariat is gauged by the value of the `hundis’ (promissory notes) held by heads of Government corporations, but the hapless men have realised the `hundis’ are hardly worth the paper they are printed on.

This precisely has been the experience of bosses at the Jammu and Kashmir Projects Construction Company (JKPCC), now holding State Government hundis totalling Rs 70 crore. G.H. Talib, JKPCC’s financial controller, says that while the `hundis’ were supposed to be exchanged for cash, banks were refusing to honour them and this included the Jammu & Kashmir Bank. Says Talib, “At some banks we have been told the hundis have thevalue of rough paper. Many of our projects have been grounded. Others are going to face massive cost over-runs.”

The JKPCC is presently handling about 200 projects for the State Government and as the company’s technical officer, Z.A. Andrabi revealed, a majority had been effected by the cash crunch.

This included almost all the gutted schools which were to be rebuilt this year and several multi-crore projects for construction of new Government buildings. If any work was being carried out on sites, it was because the JKPCC had, in turn, run up huge arrears with companies supplying them steel, cement and other construction material.

In June, the then additional chief secretary (finance), Shafi Pandit, told the Planning Commission that their revised plan for 1997-98 had fallen short by Rs 203 crore, the reason why bills and hundis issued by them in March still awaited settlement. Pandit’s successor, Ajit Kumar, now estimates their dues would be between Rs 300 crore and Rs 400 crore. As evidence of thedexterous financial management he has been doing, Kumar shows the State’s “balance-sheet” for October which shows receipts of Rs 450 crore as against an expenditure of Rs 994 crore. The expenses included uncashed hundis worth Rs 101 crore issued by them in March; hundis worth Rs 25 crore issued to the JKPCC in April and hundis worth Rs 40 crore issued to the Food Corporation of India (FCI).

Besides this, the document showed outstanding bills for Rs 23 crore with the State Electricity Board; bills totalling Rs 28 crore pending in the Civil Secretariat Treasury; Rs 107 crore pending in treasuries in the Kashmir Division and Rs 124 crore pending in the Jammu Division.

Kumar himself admits the situation is “worrisome” and says the delay in release of the State’s Annual Plan and the brief working season in J&K has aggravated their problems. “When we talk about our problems to officials in New Delhi, they are all very sympathetic. But we want their sympathy to translate into action,” he reiterates.

Lastmonth, the finance department circulated a two-page order listing “austerity measures” imposed on all departments. The critics of the Government say the move is far too belated. Among the austerity measures listed are a 10 per cent cut in expenses incurred for maintenance, repairs and supplies as well as a ban on purchase of new vehicles and furniture. All official banquets, according to J&K’s new austerity code, stand cancelled except, of course, the order clarifies, those hosted by the Chief Minister and Cabinet Ministers.