Steel, cement cost hits C'wealth Games projects

With less than two years to go before Delhi hosts the 2010 Commonwealth Games, at least four infrastructure projects worth Rs 300 crore have not found any contractors due to the steep rise in prices of steel, cement and other raw materials.

The Central Public Works Department, responsible for awarding these projects, which include construction of stadiums, a media centre and a hostel, among others, has failed to get contractors for these projects due to the government's inability to address their concerns over the unprecedented rise in prices of key raw materials.

The projects include a Rs 100-crore wrestling stadium, a Rs 25-crore hostel, a media centre at Indira Gandhi Stadium, a space planning project costing Rs 100 crore at Jawaharlal Nehru Stadium and a Rs 70-crore project to refurbish Karni Singh Stadium in Tughlakabad.

The last day for submitting the tender for these projects was April 24, which has been postponed to May 6. This is the sixth postponement due to lack of bidders.

Besides, seven-eight projects being implemented at Indira Gandhi Stadium, Jawaharlal Nehru Stadium and Dr Shyam Prasad Mukherjee Stadium are progressing at a slow pace due to delay in the procurement of key raw materials.

Builders say steel and cement, which together constitute around 60 per cent of the total input cost of any stadium project, have become substantially more expensive. It will be difficult to go ahead with these projects without a suitable compensation mechanism, they say.

Arun Sahay, chairman, Builders Association of India, Delhi unit, and CEO of Ahluwalia Contractors, which is constructing a swimming pool complex at the Talkatora stadium, said, "Builders have decided to boycott all future projects related to the Commonwealth Games on the ground that existing cost escalation norms, linked to the Wholesale Price Index, are not commensurate with the actual increase in prices of raw materials. So we have demanded that the CPWD and the Ministry of Urban Development rework the cost escalation norms and link them to the base prices of commodities published every month by the CPWD, which we think are more realistic".

An official of the CPWD said the Directorate of CPWD studied the matter and recommended a change in the central contract conditions to address these issues raised by the builders.