Mumbai, July 3 -- The municipal corporation (MC) in Ludhiana has said that a sharp rise in bitumen prices following supply disruptions linked to the conflict in West Asia has increased road construction and repair costs by nearly 50 per cent, placing additional strain on the cash-strapped civic body. Municipal officials reported that the price of bitumen has risen from about Rs 50 per kilogram (kg) to roughly Rs 75 per kg, substantially escalating costs for ongoing and upcoming projects. The rise follows supply disruptions and has compounded delays already affecting the delivery of works.
The superintendent engineer for buildings and roads, Sham Lal Gupta, said every project involving bitumen would be affected and that the increase will push up project costs across the city. Under existing contract conditions, the municipal corporation must compensate contractors for increases in the prices of essential construction materials if the escalation occurs within six months of the issuance of a work order, adding to expenditure. That clause has heightened the financial exposure of the civic body.
The development coincides with delays in fund releases for development works. Although the finance department sanctioned Rs 560 million (mn) in April, officials said only the first tranche of Rs 130 million (mn) was released in late May after considerable delay, stalling projects such as the reconstruction of Gill Road and blacktopping work on Jagraon Bridge for more than a month. Contractors have since submitted fresh bills totalling around Rs 80 million (mn), but payments remain pending as the civic body awaits further releases.
A shortage of bitumen had earlier delayed blacktopping of roads dug up under the 24x7 surface water supply project; while excavation was completed in several areas in January, resurfacing work could begin only in May because material availability was limited. Municipal officials warned that if the supply situation does not improve, further projects may face additional delays and cost escalations. The combination of material price shocks and constrained fund flows has increased pressure on the municipal corporation's ability to deliver scheduled works.
Published by HT Digital Content Services with permission from Construction World.