Date:22/10/2008 URL: http://www.thehindu.com/2008/10/22/stories/2008102250340100.htm

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State to pay higher rates for public works

Girish Menon

THIRUVANANTHAPURAM: A large number of roads, bridges and building construction work that had been stalled owing to the steep increase in cement and steel prices will now get a reprieve as the State government has finally decided to cover up the additional costs incurred by government contractors under this head.

Government contractors had stopped work on these projects that had been launched during the 2004-05 period when cement and steel prices shot up making it uneconomical to work at the agreed rates. According to government sources, work had been stalled on 122 roads, 89 bridges and 91 buildings. The LDF government, as soon as it came to power, had ordered a review of all ongoing work awarded by the previous UDF government’s period and had refused to sanction higher rates to cover up cement and steel prices. The Government has now reversed this stand in the face of the possibilities of major construction projects coming to a stand still because of the fluctuation in cement and steel prices.

The higher rates would be applicable only for works that have been given extension or those that are still under construction and in cases where work has been resumed after April 1 2008. Only the cost of cement and steel would be covered and contractors would be required to give in writing that they would not claim higher rates for other construction materials.

Not eligible

Contractors who had abandoned works on grounds other than any lapse on the part of the government would not be eligible for the new rates and their work agreement would be terminated. Contractors who had abandoned works owing to the delay in land acquisition would be allowed the new rates if they are willing to resume construction.

The government had also decided to re-tender all construction projects that have been stalled owing to the refusal of the contractors to resume work on incomplete projects even after the decision to cover cement and steel prices. The higher rates paid for cement and steel would be reimbursed on production of actual bills. According to government sources, the new rates would be applicable to all works undertaken by the departments of Public Works, Irrigation and Harbour Engineering