Citing cost escalation, the Builders’ Association of India has requested the Andhra Pradesh Government to increase the payment for various irrigation projects now under execution.

President of Builders Association B. Seeniah said today that the cost of raw materials has gone up and some of this gets factored in the agreements.

But the significant hike in labour costs (from about Rs 100 to Rs 300 per day) and some of the other inputs and delays in implementation due to hurdles have significantly boosted the execution cost.

Unless this is factored by the Government and additional funds cleared, contractors would have no other option but to stall work. Scores of contractors will face bankruptcy, he said.

Addressing a press conference along with S.P. Reddy, spokesperson for the builders’ association in AP, and P. Mohan Reddy, state chairman of the Association, Seeniah said for nearly about Rs 50,000 crore worth contracts, about Rs 5,000 crore more has to be released to make the construction contacts viable.

Large irrigation projects have a cascading impact on the state economy, they observed.

(This article was published on August 4, 2012)
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