Infrastructure firms in financial trouble

The firms, which waited for nearly three months for resumption of works, particularly in the capital city area, have started slowly moving out of the state.

Infrastructure- Constrofacilitator

AMARAVATI: Infrastructure and engineering companies are believed to be pushed into financial trouble due to the delay in reviving the Amravati projects which have been put on holdon the pretext of reverse tenders.

The firms, which waited for nearly three months for resumption of works, particularly in the capital city area, have started slowly moving out of the state.

Since keeping manpower and machinery idle is resulting in huge financial burden, the firms have begun designing their plans and projects. Sources said that several companies have trimmed the staff on rolls with a view to lessen the burden while a few other big firms have moved the men to other locations.

The state government has pulled the plug on works worth over Rs 40,000 crores in all the departments since the change of guard in the state about 100 days ago. The government has stopped projects worth over Rs 20,000 crores in the capital city Amaravati alone. Suspecting huge irregularities in awarding contracts by the previous TDP regime, the government appointed an experts’ committee to scrutinise all projects.

Although the committee comprising retired engineers submitted its preliminary report, it is yet to give the detailed report.

The government has already decided to go for reverse tenders in Polavaram project based on the experts’ committee report and is waiting for the detailed report to take decision with regard to housing, capital city projects, road works and other irrigation projects.

However, the state government is in no hurry to revive all the major projects particularly in the capital city area due to the paucity of funds. The state government which spared around Rs 500 crores in the budget for taking up works in the capital city is expected to go slow with regard to major infrastructure works.

After seeing the mood of the government, an infrastructure giant has decided to shut down its operations in the capital city area and phase out other projects in the state. The firm, which is said to have had close links with the previous TDP regime, has resolved not to take part in any tenders.

A major infrastructure firm, which is still keen to take up major projects in the state, has also shifted 750 site engineers to other locations in the country. A senior executive of an infrastructure firm said that it is really a tough time to manage the finances under the current circumstances. The firm has shifted several site engineers and field staff involved in irrigation projects in the state to neighbouring states.

Besides suspension of works, delay in clearing pending bills is severely affecting the firm’s balance sheet as they are compelled to pay huge amounts to banks in interests, he said.

Meanwhile, municipal administration minister Botcha Satyanarayana has said they will take up only required projects keeping in view the shortage of funds. He said the previous TDP government had awarded contractors at very high prices and had taken up projects, which were not needed.

Source: ET Realty