THIRUVANANTHAPURAM: Road work undertaken by local self-government institutions across Kerala have come to a standstill following a sharp increase in bitumen prices triggered by the escalating conflict in West Asia.
According to contractors, the price of bitumen (tar), the key raw material used for road surfacing, has doubled from around Rs 8,000 per barrel to nearly Rs 16,000, prompting them to suspend all work. With a majority of roads in shambles and the southwest monsoon fast approaching, the stalled projects have left panchayats, municipalities and corporations in a fix.
According to estimates, 50% of the Rs 2,500-crore plan fund outlay is spent on road work. This is in addition to road projects taken up under MLA funds, budget allocations, and more.
The contractors stated that the state government should compensate for the difference in cost to resume work. They have informed the authorities that they cannot execute work at the rates quoted in their tenders as doing so would lead to heavy losses.
B Mohankumar, vice-president of the Kerala Government Contractors Federation (KGCF), said the government has been giving Rs 48 for 1kg of bitumen. “The cost has climbed to Rs 105 per kg and is escalating by the day.
It isn’t financially viable for us to continue with any of the works and hence we have stalled all the projects. We had already submitted representations to all the MLAs and government bodies. Now, we will be giving them again to the new MLAs,” Mohankumar said.
Official sources said if additional funds are not sanctioned, local bodies may have to scale down projects by reducing the length or scope of roads.
“Such changes would require revised project reports and fresh approvals from district planning committees (DPCs), adding to delays,” said an official with the local self-government department.
The official said the finance department has to take a decision and revise the schedule of rates.
‘Current spike in bitumen prices unusually sharp’
“Once approved, the revised rates are reflected in all future estimates. If prices come down later, rates are reduced accordingly.
The current spike in bitumen prices has been unusually sharp and sustained, making it difficult for the department to assess the situation and revise rates immediately,” the official said. Further, the official said the projects are funded by local body plan funds, MLA funds, and other schemes.
“Any additional cost will require separate approvals from the competent authorities. The contractors taking up small projects have already stopped the work. Getting more funds for road work taken up under the plan fund will be difficult,” the official said.
Rajesh V R, Thiruvananthapuram district president of KGCF, said a vast majority of the contractors have wound up their operations because of cost escalation.
Local bodies affected
The price rise has affected road works being executed by grama and block panchayats, municipalities and corporations across the state. Projects planned under plan fund, spillover work from previous financial years, and recently awarded contracts have all been hit.