Economy

Builders body threatens to stop work on irrigation projects

Our Bureau Hyderabad | Updated on December 22, 2011 Published on December 22, 2011

Wants Govt to consider its demand on cost escalation





The Builders Association of India (BAI), Andhra Pradesh chapter, has threatened to stop work on ongoing Jalayagnam irrigation projects, if the Government does not consider its request for cost escalation.

Addressing a press conference here today, representatives of BAI, Mr P. Mohan Reddy, State Chairman, Andhra Pradesh, BAI, along with Mr S.N. Reddy, Past Chairman, Andhra Pradesh, and Dr C. Satyanarayana, said that the cost of inputs have gone up necessitating immediate increase in the contractual price by taking escalation aspects into account.

“Unless this issue was addressed, they would be forced to stall work from January 10. The cost of several inputs, including material, transport and wages for labour had spiralled in the past few quarters. Unless the escalation rates are provided, they would not be able to go head with the contractual obligations,” they said.

They cited the case of an Rs 650-crore lift irrigation project coming up at Kalwakurthy. Thus far about Rs 500 crore was deployed on the project and there has been delay in completing it due to paucity of funds. If the balance is released early along with the escalation amount, the project when completed would have achieved its objective, they said.

Referring to the Jalayaganm project, which seeks to bring more lands into irrigated cultivation, they said that the State Government had contracted for execution of 88 projects with an outlay of about Rs. 46,000 crore. Thus far, the Government had released about Rs 35,000 crore. They need to provide the necessary funding at the earliest along with the escalation amount to harness the full potential of these projects.

If they do not provide this amount, the project purpose would not be served. And if the contractors back out, the Government would have to shell out at least thrice the current amount. Therefore, they called upon the Government to reason out and release funds factoring the cost increase over the contractual period.

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Published on December 22, 2011
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