BAI seeks govt relief to tackle rising material prices

Builders’ Association of India has urged Chief Minister Uddhav Thackeray to take action against the abnormal rise in the construction materials such as steel, cement, bitumen and diesel, among others.

If corrective action is not taken, BAI said construction firms will go bankrupt and affect completion of ongoing infrastructure projects.

The association has urged the government to remove upper ceiling in the price variation clause and give some respite to the industry.

A letter written by Harshad Shah, Chairman, BAI, said the sudden and unprecedented price rise of 75 per cent, which contractors cannot absorb as there is no clause in the tender of paying the difference of price as the contractors are working on the fixed contract rates.

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The letter adds that government contractors will face heavy losses, leading to bankruptcy. This will adversely affect the government’s development work , he said.

“The government should pay the difference of rate of major construction materials from the date of submission tender till the date of execution of the work of control items considering the basic rate on the due date of the Tender, over and above the regular price variation.

The Maharashtra government should consider having a Standard Bidding Document across all its departments and semi-government works authorities, to avoid litigations and complications, the letter has stated.

Cement has increased to ₹6,700 a tonne from ₹5,300 in April 2020, which translates into 25 per cent. Similarly Bitumen prices have been hiked by 87 per cent (from ₹28,100 to ₹52,630 a tonne), MS Plates by 115 per cent (from ₹36,200 to ₹78,000 a tonne) and Tor Steel by 78 per cent. (from ₹36,000 a tonne to ₹66,000 a tonne), the letter has stated.

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