Contractors halt GHMC projects as prices spike

HYDERABAD:  A majority of the engineering works in Greater Hyderabad Municipal Corporation (GHMC), including maintenance and project works, have ground to a halt as contractors are unable to cope with the steep hike in prices of construction material. Works worth an estimated Rs 400 crore to Rs 500 crore have been halted as contractors try to cope with spiralling prices of materials like crushed stones, cement, iron and steel etc. The works impacted include Engineering Maintenance, as well as Strategic Nala Development Programme (SNDP) and  Strategic Road  Development Programme (SRDP) projects. 

However, major construction firms continue to work on projects since they do not depend on local firms to supply construction material. Contractors say that stone crusher owners have raised metal (crushed stone) prices from Rs 400 to  Rs 900 per tonne. Metal is an important component in the construction, laying of roads, stormwater drains, widening of nalas, and construction of retaining walls along the side of nalas, GHMC Contractors Association general secretary Surender Singh told Express.    

He said that the  Association wants the State government to take stringent action against crusher owners as well as ready-mix manufacturers and see that rates are normalised so that works can resume at the earliest. “There is an urgent need to bring in regulatory mechanisms to control the abnormal increase in the prices of construction material,” Surender Singh said. 

Sources said that the ready mix concrete manufacturers and crusher owners have formed a syndicate leading to an escalation in the prices of material. GHMC officials too admitted that engineering works have taken a hit due abnormal increase in metal prices. ‘’The state government has to consider the issue. Contractors have bagged the works at old rates; the government should revise the rates as per the prevailing market prices of material,” Surender Singh added. 

Apart from a huge increase in metal charges and ready-mixed concrete, the government has recently enhanced the seigniorage fee and permit fee,  which is another cause for worry. Recently, ready-mix concrete manufacturers have increased prices due to rising prices of raw materials like cement, aggregates, diesel etc.