Kottayam: Kottayam: Government contractors in Kerala continue to await payment for completed works despite the change in government [(which assumed office on May 18, 2026)], with pending dues from major departments now exceeding ₹12,000 crore.

The largest outstanding amounts are from the Public Works Department (PWD), Water Resources Department and Local Self-Government Department.

The PWD alone owes contractors around ₹4,250 crore. Of this, ₹1,305 crore is pending for road and bridge construction, as well as road maintenance works, carried out between November 2025 and April this year.

In the department's Buildings Wing, dues for the same period stand at ₹344 crore.

Contractors are also awaiting ₹18.44 crore from the Kerala Road Fund Board and another ₹36 lakh for road restoration works undertaken after the Jal Jeevan Mission projects. No payments have been released for any category of work executed after November 2025.

Pending payments from local self-government institutions are estimated at around ₹4,000 crore. The total arrears in these institutions had reached ₹12,000 crore. Of this, the government cleared ₹8,000 crore in two instalments. However, not a single payment has been sanctioned for bills submitted after March.

The Water Resources Department also has outstanding dues of around ₹4,000 crore. Representatives of government contractors recently met the Public Works Minister regarding the issue. The department has informed them that a meeting of all stakeholders will be convened after July 15.

Meanwhile, payments pending from the Kerala Water Authority are expected to be released only in line with the allocation of funds for various phases of the Jal Jeevan Mission.

The PWD currently operates a bill discounting scheme to facilitate payments. Under the scheme, contractors receive the value of approved bills as bank loans through designated financial institutions. However, contractors have objected to the condition requiring them to bear half of the interest on the loan.

"We accept the scheme only because we need to receive the money somehow," said Varghese Kannampally, State President of the Government Contractors' Association.

Delays in government payments affect contractors' ability to repay bank loans taken to execute projects, increasing the risk of being blacklisted by banks.

The long-pending demand of government contractors is to adopt the Trade Receivables Electronic Discounting System (TReDS), which is implemented by the Centre. Under the TReDS mechanism, banks disburse the amount due against contractors' bills as loans, while the government bears the entire interest burden.