The Hindu : Front Page : Second phase of KSTP from January

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Friday, Nov 11, 2005

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Second phase of KSTP from January

Special Correspondent

THIRUVANANTHAPURAM: Public Works Minister M. K. Muneer said here on Thursday that the contract for the second phase of the World Bank- funded Kerala State Transport Project would be re-tendered. Works would begin by January next year.

Addressing a press conference, the Minister said bids had been called for the second phase a year and a half ago. However, the contract was kept in abeyance on the advice of the World Bank, pending completion of at least 50 per cent of the land acquisition. The Cabinet had decided to re-tender the work on account of the time lag.

Mr. Muneer said cost escalation had occurred in the first phase as the LDF Government had started the project without acquiring the land. However, it was necessary for the then Government to proceed that way to avail the World Bank assistance, the terms for which were negotiated by the Central Government. The previous Government had called the bids (except those of maintenance contracts), and the present Government had awarded the tenders. The work on the first phase would be completed by April next year.

The Minister clarified that the anticipated increase in costs for the two phases was only around Rs.500 crores. There would not be additional costs of the order of Rs.2,000 crores as alleged. It was the revised total cost. The original estimate was of about Rs.1,500 crores.

The Minister said that the additional expenditure to be incurred in the first phase would come to about Rs.200 to Rs.300 crores. Of this, Rs.85 crores pertained to pipe laying for water supply. Originally, only an expenditure of Rs.5 crores had been anticipated for replacing pipes under the roads. However, when the work was taken up, many pipes were found to be broken and had to be replaced.

Besides, Rs.80 crores had to be spent on acquisition, rehabilitation and resettlement of the evictees against an original estimate of Rs.25 crores. Rehabilitation and resettlement of evictees was one of the terms agreed to by the previous Government as wanted by the Centre. Delay in land acquisition led to cost escalation in construction.

Mr. Muneer said that the development of road between Mannarkulangi and Pampa was proposed to be taken up on an annuity-based build, operate and transfer scheme. The work did not form part of the master plan for the development of Sabarimala and the pilgrims would not have to pay any toll for using the road. "The Government will pay the annuity."

He said that the work had been negotiated for execution by a Malaysian public sector company during the LDF and UDF rule. However, it could not be awarded because of the high rate of interest sought by the Malaysian company. Decision on calling fresh bids was pending.

The Government, he said, would be withdrawing from implementing performance-based maintenance contracts because of protests from small contractors. The contract could be given only for long distances and only big players would be able to bid for the work. A conference of contractors is, however, planned to create awareness among contractors about the proposed system.

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