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September 08, 2008


Steel & cement cost hits Commonwealth Games projects

It is reported that, with less than 2 years to go before Delhi hosts 2010 Commonwealth Games, at least 4 infrastructure projects worth INR 300 crore have not found any contractors due to the steep rise in prices of steel, cement and other raw materials.

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

The last day for submitting the tender for these projects was April 24th 2008, which has been postponed to May 6th 2008. This is the sixth postponement due to lack of bidders.

As per report, 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.

Besides, seven to 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 said that steel and cement, which together constitute around 60% of the total input cost of any stadium project, have become substantially more expensive. They added that it will be difficult to go ahead with these projects without a suitable compensation mechanism.

Mr Arun Sahay chairman of Builders Association of India, Delhi unit, which is constructing a swimming pool complex at the Talkatora stadium, said that "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."