The Hindu : Tamil Nadu News : Builders association moves government

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Wednesday, Apr 16, 2008
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Tamil Nadu

Tamil Nadu

Builders association moves government

T. Ramakrishnan

CHENNAI: The Builders’ Association of India has approached the State Government to come to the rescue of government scheme contractors in the wake of the run-up in steel price.

Association leaders, including J.R. Sethuramalingam and M.K. Sundaram, say the price per tonne has gone up by Rs.20,000 in the last one year. The government’s price adjustment order issued last month is applicable to new projects, not the ongoing ones. To complete the projects, the contractors need the government’s relief through a mid-term revision.

To support their contention, they cite the orders issued by the Maharashtra and Andhra Pradesh governments, which have either given retrospective effect to the price variation clause or applied the clause to the ongoing projects.

R. Ponnusamy, general secretary of the association of contractors who handle projects of the Police Housing Corporation, wants the government to give retrospective effect to its order, with January as the base period.

While acknowledging the increase, senior government officials say the contractors have to abide by contractual obligations. Small and new contractors may have been hit hard, but those who have been in the business for long would have built a cushion and could absorb the impact. So far, the input cost increase has not perceptibly affected the execution of government projects, the officials say.

During 2007-2008, three major departments involved in infrastructure development —Public Works, Highways and Municipal Administration and Water Supply (MAWS) —spent Rs.5,185 crore.

Contrary to the perception in certain quarters, the expenditure was higher this time. For instance, against the budgeted expenditure of Rs.1,318 crore, the Municipal Administration and Water Supply Department spent Rs.1,493 crore. The Tamil Nadu Water Supply and Drainage (TWAD) Board, an arm of the Municipal Administration Department, has requested Central and State governments to provide Rs.180 crore immediately.

An official says tsunami-related works, coming under the Rural Development Department, are carried out on a turn-key basis. So there is no question of the government providing steel.

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