MGCCL under financial strain

SHILLONG, Sep 11: The Meghalaya Government Construction Corporation Limited (MGCCL) has been suffering for the past few years as the volume of work has decreased drastically with some government departments opting to allot and execute their projects internally.
As per the MGCCL 42nd annual report 2019-2020, the Corporation has been going through a very lean and challenging period during the last few years
“The volume of workload has come down drastically due to the fact that some government departments have decided to allot and execute their projects internally,” the report said.
The report states that works executed by the corporation is Rs 47.45 crore against Rs 45.04 crore in 2018-2019 and revenue income has come down from Rs 4.71 crore last year to Rs 4.22 crore this year.
“One of the factors which affects the revenue income is that in recent years, due to competitive bidding the agency charge on NVS projects (which forms the bulk of the works executed) has come down to 5.02% from 8% in the past,” the report pointed out.
It mentioned that work from police department, “a major and valuable patron over the years”, has also become less and less in recent years.
Due to the pandemic, construction activities of major projects of JNV all over Northeast India and other projects were disrupted and accordingly physical progress of all projects could not be achieved as per target.
Maintaining that the corporation was given an opportunity to present their problems before the Chief Minister Conrad K Sangma on July 7, it stated, “We had a fruitful discussion, followed by a meeting at a later date with the Commissioner Finance , wherein the officers of the corporation along with the then Secretary, PWD and Chief Engineer (B) were present.”
“This has resulted in the release of the managerial subsidy and also the long-pending fund due from the Education department. The CM also assured in the meeting that he has some projects in mind to allot to the corporation. This will definitely give a major boost to the financial stress which the Corporation is facing during these extremely difficult times,” the report added.
The Authorised Share Capital (ASC) of the MGCCL, as per the report, remains at Rs 2 crore and the Paid Up Capital at Rs 0.75 cr as on March 31, 2020.
However, after several requests made by the corporation, the government has enhanced the ASC from Rs 2 crore to Rs 5 crore in 2020-21. The government has also released the Enhanced Share Capital of Rs 3 crore, which was received by the corporation in January 2022.
According to the report, enhanced share capital will ease the financial constraints of the company.
The corporation has requested to the State PWD to incorporate the Balance Authorized Share Capital of Rs 125 crore in the 2022-2023 Budget.
As on March 3, 2020, the total number of employees at MGCCL is 103.