Mumbai: BMC owes Rs 4,000 crore, but doesn't know to whom!

The amount is the sum of all refundable deposits the civic body has collected from its contractors in the past 10 years; but officials have no records of how much each company paid, and hence, don’t know how much to return

The Brihanmumbai Municipal Corporation (BMC) is sitting on a pile of money that it owes to contractors, but has no clue how much is owed to which firm. The civic body collects a deposit from each contractor before awarding a work order to the firm. This amount is returned after the work is completed.

If a contractor comes asking for his money back, the BMC has no record to verify his claims
If a contractor comes asking for his money back, the BMC has no record to verify his claims

However, over the last eight years, civic authorities seem to have been only collecting the deposit amounts, not documenting it. As a result, the BMC has now ended up with a mammoth R4,000 crore that is owed to hundreds of contractors, but it has absolutely no paperwork to refer to should the contractors claim their respective amounts back.

The gargantuan error was highlighted in a corporators’ meeting last week. Raees Shaikh, group leader of the Samajwadi Party in the BMC, pointed out the blunder in the balance sheet and demanded to know how the civic body planned to pay back the contractors and vendors.

“I don’t understand why the BMC cannot clear this liability of R4,000 crore; it’s a huge amount. They don’t even have records of who has to be repaid. If a contractor presents some documents to claim money, the BMC has no records to verify the numbers,” Shaikh said.

Other errors
Several other mistakes surfaced in the civic accounts. Corporators noticed that the closing balance of one year did not match the opening balance of the following financial year. At one place in the balance sheet, cash is shown in the negative, leading many to question how such a thing could be possible.

The sheet also showed depreciation of assets that weren’t even included in the assets column. The corporators further said that the balance sheet had been presented to the Standing Committee some months ago without the signature of an auditor, which cannot be done.

BMC speak
Sources in the BMC attributed the situation to the process of converting the management system to SAP, which began in 2007 and took five years to complete. During this period, the official said, records were misplaced. The BMC officer said, “The deposits are important and we do return them at regular intervals.

This amount has been accumulated over a period of more than eight years. With the SAP module coming in, various records were misplaced. We will have to now check if there are requests for claiming money.” Despite repeated attempts, Additional Municipal Commissioner Rajeev Jalota remained unavailable for comment.

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