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After bitcoin scandal, Bommai govt faces heat over ‘40% commission’ claim by govt contractors

Karnataka contractors association alleges BJP leaders demanded '40% commission' to clear bills for govt tenders. While CM has ordered probe, Congress wants Bommai govt dismissed.

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Bangaluru: Barely two weeks after Prime Minister Narendra Modi urged Karnataka Chief Minister Basavaraj Bommai to ensure that the BJP government in the state had a “clean image”, allegations of demand for “commissions” and corruption in government contracts has hit the state authorities.

In a rare occurrence, the Karnataka State Contractors Association has accused the BJP government, parliamentarians, legislators and officials in the state of harassing them to pay a commission of up to 40 per cent on government tenders.

The allegations come on the heels of an alleged bitcoin scam, that has already created trouble for the Bommai government.

The allegations by the contractors association were first made in a letter that the association wrote to the Prime Minister’s Office on 6 July 2021, when former chief minister B.S. Yediyurappa was still in office. The association made the letter public last week, demanding reprieve from the “continued harassment”.

“Demand for commission has been the norm for decades now, but never has it been this high. Since 2019, contractors have been harassed to no end with demands for commission at every stage of a project. Never has the association written such a letter. If we have done so now, then please imagine our plight,” D. Kempanna, president, Karnataka State Contractors Association, told ThePrint Friday.

He claimed that they were inviting the wrath of the government and the bureaucracy making their problems public.

“Some of the concerned ministers insist and harass for payment of 5% of the tender amount before approval of tender and issue of work order. A very few elected representatives of Lok Sabha insist and harass for payment of 2% on tender before starting work,” alleged the letter sent by the association to the PMO in July. ThePrint has a copy of the letter.

The letter also alleged that at the taluk level, elected representatives demand five per cent of the tender amount on building constructions and 10 per cent on road works. According to the letter, local registered contractors in Karnataka have to allegedly pay 25%-30% to elected representatives and others. After completion of works there is harassment to pay 5%-6% towards the release of the letter of credit (LOC) against pending bills, the letter alleged.

Speaking to ThePrint, Kempanna alleged that the situation has remained the same despite a change of chief ministers. “We were hoping to see some reduction in harassment with the new chief minister. Nothing has changed so far,” he said, claiming that senior government officials were being pressurised to contest the claims made in the letter sent to the PMO by the contractors’ association.

While Bommai — who took charge as the Karnataka CM on 28 July — told the media that the state government has already ordered a probe in the matter, he dismissed the letter by the contractors’ association as lacking in evidence. The Congress, however, seized the opportunity to request the Governor to dismiss the BJP government in the state.

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No proof, still ordered probe, Bommai says 

Already under scrutiny over the alleged bitcoin scam, the resurfacing of the four-month-old letter has left CM Bommai red-faced.

“After my government was formed, I asked the Chief Secretary to scrutinise all tenders, even those that may have been allotted after I became chief minister. If there are discrepancies, the guilty will be punished. I don’t know why contractors wrote to the PMO, but it is a generic letter with no proof or evidence yet we are ordering a probe. That is us being transparent,” Bommai told reporters Thursday.

He added that two committees headed by retired judges will be formed to evaluate tender estimates and conditions. Bommai’s stress on “his government” seems to be an effort at distancing himself from allegations against the previous Yediyurappa government.

Answering the CM’s doubts about why the letter was written, Kempanna told ThePrint, “We wrote the letter to PMO because nobody in the state government was listening to us. How do they expect contractors to work well if we have to give up 40 per cent of our tender money? I have been working as a government contractor for 35 years now, but I have never seen such high demand for kickbacks.”

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Congress asks governor to ‘dismiss’ BJP govt

Seizing the opportunity, Congress leaders Thursday evening submitted a memorandum to Karnataka Governor Tawarchand Gehlot, expressing concern over corruption allegations.

“We can’t sit quiet when such rampant corruption is taking place. We have demanded that this government be dismissed and a judicial inquiry should be ordered,” D.K. Shivakumar, Karnataka Pradesh Congress Committee (KPCC) President told reporters, after the party’s meeting with the Governor.

In their letter, the contractors association has also alleged that conditions to procure tenders on the government’s e-procurement portal were “unjust”. “Direct works are allotted to non-registered contractors who are close aides of politicians by collecting 10 per cent commission on estimated cost,” Kempanna alleged Friday.

The Congress in its memorandum has also alleged that some contractors have hired hackers to manipulate tender allocation, drawing reference from a case of hacking of government portals currently being investigated by the CID and involving bitcoin scam mastermind Srikrishna Ramesh, to back their claims. The party has also pointed to recent anti-corruption bureau raids on officials of various departments as “testimony” to claims of commission.

Ironically, Prime Minister Narendra Modi during the campaign for the 2018 assembly elections in Karnataka had accused the then Congress government of being a “10 per cent commission” government.

When reminded of the PM’s allegations, Siddaramaiah, leader of the Opposition in the state assembly, told reporters Thursday, “That was a political speech with no basis. But here is a document — a letter by contractors themselves, accusing the BJP government of being a 40 per cent commission government.”

Also read: How Karnataka Congress plans to use Mekedatu to ‘expose BJP’s double engine growth’ promise

Bommai under constant stress

CM Bommai Friday retaliated to Congress’ memorandum deeming it “comical”. “Tenders from their time will also be scrutinised,” he said.

Sources in the BJP, however, say that the timing of the allegation has compounded Bommai’s stress. “For a newly-elected Chief Minister, the honeymoon period is six months. But for a midterm CM like Bommai, it is only three months. That period is now over and challenges are being thrown his way. We have no qualms in accepting him as a capable leader if he is able to prove himself,” a National General Secretary of the BJP had told ThePrint in September, hinting that the way forward would not be smooth for Bommai.

Complaints against Bommai from within the party and government include the alleged slow speed of paperwork. “Two letters I sent to the Chief Minister during his first week in office are still lying on his table. Here, I have made a list of files that he has kept pending,” a senior minister in the Bommai cabinet told ThePrint. The delay in clearing files is said to have added to the contractors’ grouse, according to government sources.

Also read: Why BJP’s 1-1 result in Karnataka bypolls is a win for Yediyurappa, step back for CM Bommai


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