The Punjab government has stopped payment to its contractors of major nation-building departments since mid-November and construction work has come to a halt on some projects, Sardar Ishaque Khan Chairman Federation of Punjab Contractors Association told Business Recorder here on Saturday.
He said due to non-payment of bills by the Punjab government for nearly a month, the contractors have exhausted their bank credits and cash resources in clearing dues of the supplier of construction materials, sub-contractors, engineers and labours of the project.
Khan said that a delegation of the contractors would meet Secretary Communication and Works on Monday to press immediate payment of their dues. Khan said apparently the Punjab government is cash starved and depending on bank overdrafts to run its day-to-day affairs. However, he said the government is making payment up to bills not exceeding Rs 1 million.
C&W department sources told that the Finance Department has withdrawn the unspent funds of the major projects of C&W, Irrigation, Health and Education departments. It may be recalled that Punjab government got converted its Rs 70 billion overdraft into a State Bank loan when the federal government was alerted in September this year that the provincial government was using this money to provide subsidies on food etc.
PML (Q) leader and former Chief Minister Chaudhry Pervez Elahi has accused Shahbaz Sharif led government of financial mismanagement and turning the province into deficit despite the fact that PML (N) had inherited a surplus province having an ADP of Rs 150 billion.
Financial experts say that in case of an overdraft, the federal government immediately deducts the amount from the province's share of the divisible pool (the federal resources distributed among the provinces and federal government), which intensifies the fiscal deficit of the borrowing government concerned. They say that Punjab government has been using the overdraft amount for non-development expenditures, including the subsidy on wheat and sugar during the month of Ramazan and on the monthly salaries of government servants for some time.