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Contractors rue ‘cuts’
Correspondent KOHIMA, JAN 11 (NPN):
Published on 12 Jan. 2009 12:51 AM IST
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Systemic corruption at various government levels is an “open secret” with the state’s major chunk of the development funds siphoned off in at various levels leaving hardly less then half the fund for sanctioned projects. According to sources, an estimated amount of about 50% to 65% of the total development funds end up in the form of “cuts” leaving hardly 35% to 40% for the contractors to execute the developmental work. Contractors find it difficult to implement projects with less than half of the sanctioned amount. A contractor or supplier is made to part with 10% of the total work amount in advance as “cut” during table tender or less lose the contract, said a contractor speaking on condition of anonymity. Adding more woes to the contractors, high government functionaries were even demanding cuts up to 30% under their respective departments. Contractor also had to shell out another 7% of the total amount of work as “political fund” , another 10% to the politicians under whose constituency the work fall, 13% as departmental Tax/Processing funds that includes VAT and 4% professional tax. Some percentage is also deducted as fee for the officers of the departments besides 1% to 5% as underground tax. Given the case, a contractor ends up having to suffer cuts of about 50% to 65% of the total amount and left with hardly 35% to 40% to complete the works. In a related case, contractors in some departments discovered that the sanctioned fund for works had already been siphoned off leaving hardly any money for payment. It was disclosed that the practice of “cuts” became so rampant that such departments were falling behind in their “borrowing from Peter to pay Paul” syndrome. This has led to a crisis where payment were sought to be made from sanctioned projects for which work orders were yet to be issued in order to cover the departments’ “resource gap”. The “cut-syndrome” has left some of the departments in a piquant situation of making promises to contractors which they now no longer can keep after some of the contractors had gone to court and obtained orders to the departments to release payments immediately.

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