Contractor Locks Newly Built Rest House in Himachal Pradesh Over Unpaid Dues
Financial Crisis Sparks Controversy in Himachal Pradesh
Munish Sood
MANDI, November 4
A striking incident occurred in the Sundernagar sub-division of Mandi district, Himachal Pradesh, when contractor Shiv Ram locked the newly built ₹3.73-crore Rest House of the Public Works Department (PWD) due to nearly a year of unpaid dues.
This event has not only embarrassed the PWD but has also highlighted the escalating financial difficulties faced by the Himachal Pradesh government.
The modern, two-story Rest House, which features VVIP and VIP suites, a conference hall with a capacity of 200, and four deluxe rooms, has remained unused for several months. Despite its completion last year, the department has reportedly failed to pay approximately ₹1 crore owed to the contractor.
Witnesses reported that the contractor arrived with his team in the morning and secured the main gate, expressing that the department's ongoing delays left him with no alternative. This protest attracted a crowd and ignited discussions about the government's declining financial credibility.
In an interview, contractor Shiv Ram stated that it has been over a year since the building was finished, yet no payments have been made.
“We have been appealing to the department for months, but there has been no progress. It is disheartening and demoralizing to continue working under such circumstances. We have invested our resources, taken out bank loans, and still have not received payment. This lock was not an act of anger but a sign of desperation,” he explained.
He further mentioned that the building, which could serve as a significant asset for visiting officials and tourists, now remains locked due to the government's inaction.
PWD Acknowledges Financial Limitations
Roshan Thakur, Executive Engineer (XEN) of PWD in Sundernagar, confirmed that the building is complete, with only furniture installation pending.
“Indeed, the structure is ready, but we have been unable to process final payments due to financial constraints. We need around ₹50 lakh for furniture, and we are awaiting budget allocation. Once we receive the funds, we will resolve the issue,” he stated.
He added that the department has already informed higher authorities about the situation and is hopeful for a prompt release of funds.
The incident in Sundernagar has become emblematic of the broader financial crisis affecting the Himachal Pradesh government. Contractors statewide claim that payments totaling hundreds of crores have been delayed for months, with no clear timeline for resolution.
Sources from the treasury acknowledge a severe liquidity crisis that has hindered payments. With nearly 70% of the state’s budget consumed by salaries, pensions, and loan interest, departments have been directed to postpone most non-essential expenses. The total dues owed to contractors across PWD, IPH, and Rural Development are estimated to exceed ₹1,500 crore.
Political and Economic Implications
This situation has stirred political reactions, with opposition parties accusing the government of fiscal mismanagement and failing to uphold basic financial discipline. The ruling party, already grappling with increasing debt and dwindling revenue, now faces rising dissatisfaction from the contractor community, a crucial sector for employment in the state.
Economists caution that ongoing delays could severely impact infrastructure projects, lead small contractors toward insolvency, and tarnish the state’s reputation among investors and central agencies.
Currently, the locked rest house in Sundernagar serves as a poignant symbol—a once-promising government asset rendered unusable due to unpaid dues. It reflects not just one contractor’s frustration but the broader struggle of a state caught between commitments and financial obligations.