Jalayagnam contractors have threatened the government that they will stop the work from January 10 if the government does not increase the rates of various materials.
The Builders Association of India (BAI), in their ultimatum served to major irrigation minister P Sudarshan Reddy on Thursday, said, “We will stop all Jalayagnam works from January 10 and take legal recourse if the government does not hike the rates.”
P.Mohan Reddy of BAI told Express that the contractors’ contention was that the costs of labour, sand and other materials including petrol, diesel, oil and blasting materials had gone up manifold in the last five years. If the government did not revise these rates the contractors would incur losses, the BAI contended.
It may be recalled that the state government proposed Rs 1.85 lakh crore works under Jalayagnam, a massive irrigation project construction programme initiated by the YS Rajasekhara Reddy government, and entered into agreements with contractors for around Rs 1.2 lakh crore works after 2004.
Though the contract period was three or five years, the works were delayed due to several reasons including delay in land acquisition. Three years ago the government was unable to pay the money for works executed by the contractors. This delayed the works further.
Contractors had to pay premium for insurance which was 3 to 4 per cent of the work cost. If the work was Rs 1,000 crore, the contractor had to pay Rs 40 crore towards insurance. Though the contract period had been extended, the government was not coming forward to pay the insurance amounts, contractors said.
Meanwhile, the labour cost has increased from Rs 150 to Rs 300 per day per head. The blasting materials’ cost too has gone up by 300 per cent in the last five years. Though, the cost escalation was allowed in regard to steel and cement, the government was not coming forward to revise the costs of sand, labour and other materials, they regretted.
The government constituted a sub-committee to look into these aspects but the committee is yet to submit its report.
Due to cost escalation, several contractors are unable to continue works and the government, invoking clauses in the agreement, filed cases against them for the delay. If the rates were not revised, several contractors would end up facing legal problems, BAI representatives said.
If the government further delays the Jalayagnam works, the cost escalation will be 300 per cent on the estimated Rs 1.85 lakh crore, as per a BAI estimate. If the contractors stop works indefinitely, the government’s prestigious programme will be in jeopardy.