Urban News

Hindustan Times 14.12.2009

To curb “corruption” in payments, and in order to avoid cons similar to the recent “ghost employees” scandal, the Municipal Corporation of Delhi (MCD) has decided to make all payments online.

Under the new system — Real Time Gross Settlement (RTGS) — the amount due to the contractors will be credited in their accounts within 30 minutes of work being completed.

Based on the Reserve Bank of India (RBI) guidelines, the RTGS system will be extended mainly to all suppliers and contractors working on various MCD projects to do away with the innate presence of the “tender mafia” in the civic body.

According to the contractors, this new system will eliminate the complex process wherein the middlemen used to delay the process of payment.

The civic body has witnessed constant agitation by contractors and suppliers over its failure to clear their outstanding dues.

“We are happy that this system is being introduced. Earlier, we had to give one per cent of the total amount of the project to the cashier for releasing our cheques in a time-bound manner,” said said Satish Lamba, president of Contractor Welfare Association. He alleged that if one questioned this norm, there was an incessant delay in the payment.

“Naturally we had no alternative but to give that one per cent of the project cost to him,” he added .

Earlier for any payments that were made to the contractors there was a system where the amount to be released was sent from the MCD headquarters at Town Hall to the zonal department. The zonal department would then send the amount for clearance to the divisions, who would then issue cheques to the contractors.

Now, once a project is completed, the due payment will be directly cleared from MCD’s appointed official bank to the eligible person’s account.

“It is the quality of work that suffers the most in the MCD in the presence of the tender mafia and the accompanying nexus of suppliers and contractors. There are many examples in which works are executed only in file and the payment is made to the contractor. This system will end that,” said a senior MCD official.