Relief for JJM contractors as Jal Shakti orders release of pending payments
Srinagar, June 4: In a significant relief for contractors, the Chief Engineer of the Jal Shakti (PHE) Department, Kashmir, has ordered the timely release of security deposits and retention money to ease the financial burden on firms executing works under the Jal Jeevan Mission (JJM).
The directive follows growing complaints from contractors who cited delays ranging from five to seven months in the disbursal of their dues, leading to severe financial distress. Some even reported halting work on critical Water Supply Schemes (WSS) due to the cash crunch.
Citing representations submitted by contractors, the department acknowledged that delayed payments were impacting project timelines and execution. The move comes through a circular issued by Chief Engineer Mohd. Taj Chowdhary, referencing the Manual of Procurement of Works–2022 and updated guidelines under Rule 171(i) of the General Financial Rules (GFR)–2017, amended by the Ministry of Finance on January 1, 2024.
The guidelines limit the combined deduction of performance security and retention money to 3% to 10% of the contract value. However, the circular noted that in several cases departments had deducted up to 15%, breaching the permissible threshold.
“In most cases, the performance security collected ranges from 3% to 5%, while an additional 10% has been deducted as retention money, which is in violation of the revised norms,” the circular states.
The Chief Engineer has instructed all Superintending and Executive Engineers to review ongoing schemes and ensure strict compliance with the financial cap. The release of withheld amounts must be carried out as per Government Order No. 77-JK(ISD) of 2025, dated March 18, 2025.
This intervention is expected to significantly improve liquidity for contractors, allowing them to resume and expedite works under the JJM—an ambitious mission that aims to provide functional household tap water connections in every rural home.
Contractors across the Kashmir Valley have hailed the decision as a much-needed and timely step, acknowledging it as a recognition of the challenges they face on the ground.
