Contractors Demand Rs 90,000 Crore from Maharashtra Govt, Threaten Legal Action

Mumbai, 14th June 2025: Contractors involved in key infrastructure projects across Maharashtra have issued a legal notice to the state government, seeking immediate disbursal of pending payments totaling over ₹90,000 crore. The notice, dated June 10, has been addressed to the Chief Minister, Deputy Chief Ministers, Chief Secretary, and senior officials of crucial departments.

The contractors, represented by the Builders’ Association of India (BAI), a nationwide industry body with over 230 branches, warned that they would approach the Bombay High Court if the government fails to respond with a clear payment timeline within 15 days.

“Our members are owed money for essential infrastructure works such as roads, bridges, water supply systems, irrigation projects, and public building repairs — many of which have been completed over a year ago,” said a senior BAI official, speaking on condition of anonymity. “Despite writing to the government in February, there has been no concrete response. We were left with no option but to serve a legal notice.”

According to BAI estimates, over ₹46,000 crore of the total outstanding amount is owed by the Public Works Department (PWD) alone.

The association pointed out that non-payment of running bills has forced many contractors into financial distress. “Banks are classifying contractor accounts as NPAs (non-performing assets) because we are unable to service our loans — not because of any wrongdoing on our part, but simply due to the state’s failure to release funds,” the BAI official said.

The legal notice emphasizes the dire situation in projects executed under the Hybrid Annuity Model (HAM), where contractors are supposed to receive payments in instalments post-completion. “Even in these cases, disbursements are erratic — sometimes as low as 6-7% of the billed amount,” the notice reads. “This discourages young entrepreneurs from entering the construction industry.”

The BAI said that in repeated meetings with government officials, the response has been the same: tight budgets and fiscal limitations are slowing down payments.

What has especially irked the contractors is the simultaneous financial commitment of the state to other large-scale welfare schemes. “We’re not against social schemes,” said another contractor affiliated with BAI. “But it’s difficult to accept that the government is spending over ₹3,700 crore every month on schemes like the Mukhyamantri Majhi Ladki Bahin Yojana — giving ₹1,500 to 2.46 crore women — while delaying payments to contractors who have already delivered public works.”

The contractors say they will wait until the government responds to the legal notice before deciding their next move. “If we do not hear from them soon, we’ll be left with no choice but to take the matter to the Bombay High Court,” the BAI official added.

The state government has yet to issue a public response to the notice.