Under political fire for overlooking the interests of Hindustan Aeronautics Limited (HAL) in favour of a private defence player, the Narendra Modi government is said to have diverted approximately Rs 200 crore of funds allocated for payment of dues to developers of military-grade infrastructure towards the Bangalore-based state giant earlier this month.

The decision to divert funds meant for private military contractors to HAL has created resentment among the military builders across the country, who are now threatening to stop operations due to shortage of funds and non-payment of dues to the tune of Rs 2,000 crore.

The Military Engineering Service (MES) Builder Association of India (BAI) said at a press conference in New Delhi on Monday that the Union Defence Ministry owes them an approximate Rs 2,000 crore in non-payment of dues. MESBAI looks after the basic infrastructure requirements of all the three wings of the armed forces, besides being involved in maintenance and operations. They also construct runaways and hangars at the IAF bases among other crucial responsibilities entrusted upon them.

The only recognised association under the Ministry of Defence, MESBAI boasts of 10,000 private contractors, collectively employing three lakh staff and 15-20 lakh labourers in the country.

“We have been facing the problem of non-payment of legitimate dues for the last three years. We have been making constant efforts to draw the attention of the government on this issue,” Praveen Mahana, the President of MESBAI, told media persons at a press conference in New Delhi on Monday.

“Due to scarcity of the funds, our members are paying to their workers by taking loans and they also buying materials from the market on credit by paying higher cost to keep continue the work. If the amount of Rs. 2,000 Crore is not released soon and the payment is made to the contractors, then they will be compelled to stop all the ongoing construction works, maintenance and operation works for all the wings of Armed Forces,” added Mahana.

MESBAI’s vice-president Azeezulla Khan said that earlier this month, MESBAI was assured of a payment of Rs 230 crore towards fulfilment of their dues, but it didn’t go through the last minute.

“We were happy to know that some of our dues had been cleared on Jan 16. But a few days later, we were informed by the Engineer-in-Chief of the Armed Forces that the funds had been diverted to HAL, since it needed the money more than us,” he says.

“If contractors are not paid soon, thousands of construction workers and due to this the basic infrastructure of armed forces, will be badly affected,” Khan added.

Balbir Singh Vij, the general secretary of the Association, says that repeated assurances from the Raksha Mantri Nirmala Sitharaman, the Engineer-in-Chief of the Armed Forces and other officials from the government haven’t been fulfilled yet.

“The defence minister had assured us in person on October 26, 2018, that our funds would be released before Diwali. However, only Rs 250 crore of the total liability was cleared then,” says Vij, adding that they had called off a “tools down” strike scheduled for Oct 29-30 after meeting the Raksha Mantri.

The military builders’ association says that the situation is so serious now that they may be forced to stop developments works of "national security” grade infrastructure in coming days if their bills remain unsettled.

The association says that they are also involved in the construction of hangars for Rafale fighter jets at the Indian Air Force bases in Ambala (Punjab) and Hasimara (West Bengal).

“Over the last four to six months, the development there has been going on at snail’s pace. More or less, the activity has come to a standstill since we don’t have the funds to pay to the contractors, who have significantly cut down on their labour,” says Mahana.

“Where would they park the Rafale aircraft, which the government has been selling off as a deal important to national security whenever they are questioned,” the association’s president asks.

Press Trust of India (PTI) reported in July last year that Rs 220 crore had been sanctioned for setting-up hangars, shelters and maintenance facilities at the Ambala air base, where 18 of the total 36 ordered Rafale jets are supposed to be stationed. The remaining 18 fighter jets will be stationed at Hasimara air base in West Bengal. The first batch of jets from the order will reach India by September 2019.