HYDERABAD: The Builders’ Association of India (BAI), Telangana unit, stopped maintenance works of national highways fearing financial losses if works are done as per the old tender rates when the contract was awarded to them. It took the decision after a series of representations submitted to the National Highway Authority of India (NHAI) fell into deaf ears.
Representatives of BAI argue that bitumen requirement will be in the range of 50 to 70 per cent even for maintenance works worth less than Rs 20 crore and as such, they were incurring huge financial losses due to escalation of bitumen prices. The maintenance works along a few national highway stretches have either slowed down or halted as contractors are unable to continue works with old tender rates.
Due to this, motorists are facing hardships as damaged highways having full of craters, potholes and puddles, often leading to accidents. During rains, water-logged and damaged roads are endangering the lives of motorists.
Bitumen prices, entirely determined by the oil companies every fortnight, have more than doubled per tonne over the last five years since 2017. Bitumen, a by-product of petroleum, accounts for nearly 50 per cent of the cost of a highway project. Bitumen is a key raw material for road construction in the country. Among the three oil marketing companies, Indian Oil Corporation (IOC) is the market leader in the bitumen segment.
Several stretches of national highways in the state have been badly damaged due to heavy rains and overloading. Contractors stopped repair works citing higher bitumen prices which increased from Rs 22,000 per tonne in 2017 to
Rs 52,000 now.
The highway stretches where maintenance works were affected include Jagtial-Karimnagar-Warangal-Khammam highway, Khammam-Aswaraopeta and Hyderabad-Bhupalapatnam under Warangal bypass limits.
Contractors say they cannot take up works with old tender rates and want price revision in line with increasing bitumen prices. The Centre and the state governments revise tender rates and pay additional amount to contractors taking into consideration the hike in raw material costs after contracts were awarded. However, the Centre extends this benefit to only those contractors who undertake works worth over Rs 20 crore and which takes more than one year for completion.
The state government, on the other hand, is extending this benefit to all contractors irrespective of cost and duration of works. The Centre pays contractors as per old tender rates for works costing from Rs 5 crore and less than Rs 20 crore and with a duration of less than a year.
Since bitumen prices are revised and prices are going up every fortnight for the past five years, the contractors undertaking maintenance works of national highways want the Centre to extend revised tender rates to all the contractors without any restrictions like state government was doing.