The contractors have now served an ultimatum on the Joshi Government, saying that if their arrears worth Rs 1300 crore are not paid before September 10, they along with three lakh labourers and their families will stage an indefinite dharna before the KVDC headquarters at Pune.

``We have stopped the construction activity with immediate effect,'' Mahendra Satao, leader of the contractors said.

``We feel that the government is not in a position to implement the Rs 7000 crore plan. At a juncture when we require Rs 200 crore per month and Rs 2400 crore per year, for undertaking civil works, no budgetary provision has been made for the purpose,'' Satao remarked.

Satao, accompanied by a record number of 54 contractors called on Chief Minister Manohar Joshitoday to narrate their grievances. ``As promised, Joshi convened the meeting today to discuss our problems. But to our surprise, Joshi did not allow us to utter a single word, saying, he was aware of their vows,'' Satao added.

``Joshi promised to make a part payment of Rs 100 crore within a day or two and another Rs 150 crore in next week. Despite Joshi's promise, in view of our past experience, we have no faith in the alliance government,'' Satao added.

Launching a frontal attack on the alliance government, Satao said while it wants its projects implemented in a phased period, no time-bound scheme has been chalked out to make the payment to the contractors.

Satao said a section of the contractors had gheraoed the corporation's Managing Director S D Bhave at Pune on August 21 to protest against the failure of the alliance government to make the payment. Then, Bhave had given them in writing that full payment of Rs 1300 crore will be made before September 6. As there were no signs of the assurance beingimplemented, the contractors sought a meeting with Irrigation Minister Eknath Khadse and Chief Minister Manohar Joshi.

Satao said after Chief Minister Joshi toured Pune-Satara areas to see for himself the progress of Krishna Valley projects, the contractors had submitted loan proposals worth Rs 3,000 crore for the project, however, there was no response from the Joshi Government.

After the alliance government came to power in March 1995, it had promised to set up the Krishna Valley Development Corporation. Accordingly, the corporation was set up in March 1996 to execute irrigation projects worth Rs 7,000 crore. It was proposed to make a budgetary provision of Rs 700 crore for five years, while the remaining amount of Rs 3500 crore was to be raised by issuing public bonds.

``While the bonds were issued as per the policy decision, but the alliance government failed to make a budgetary provision of Rs 700 crore every year,'' according to a senior official.