Rural roads head nowhere

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Soaring steel and cement prices have virtually put the brakes on the Pradhan Mantri Gram Sadak Yojana (PMGSY), the rural road component of the UPA’s flagship ‘Bharat Nirman’ programme. While rising input costs are affecting other road projects as well, rural road projects are worst-hit as contracts awarded under the PMGSY are fixed-price contracts with no room for price variations.

Responding to the fact that not many contractors have responded to new tenders and several contractors have preferred to exit ongoing projects mid-way fearing significant losses as the government would not permit any price escalation, the RD ministry is considering taking a relook at the pricing provisions.

Between January 2006 and May 2008, prices of cement went up 1.48 times, steel prices soared 1.56 times and bitumen rates rose by a whopping 1.94 times. During a review of Bharat Nirman projects last week, the rural development ministry has admitted that under the present circumstances it will not be able to complete the programme by 2009.

The ministry is working on a Cabinet note to allow changes in the approved cost of projects mid way to help finish the rural road scheme ahead of the general elections. To find a way out of the current quandary, the ministry has also set up a committee under principal secretary,public works department, Rajasthan, CS Rajan along with principal secretaries of departments handling the scheme in Assam, Maharashtra, Himachal Pradesh, Madhya Pradesh and Orissa. It is expected to submit its report next month.

More trouble Implementation of the programme has also been affected by a shortage of stone aggregates in some areas of Bihar, Assam , Tripura, West Bengal and Orissa. The states have been asked to augment supplies through better utilisation of existing sources and tapping new sources.

The government is also considering streamlining and simplifying the procedures for permits to ensure timely and adequate availability of inputs. It would further rationalise the high royalty charges for construction material charged by Assam , Maharashtra , Chhattisgarh, Haryana and Orissa.

The ministry has asked states with a high backlog of new connectivity projects to deploy enough dedicated programme implementation units (PIUs). The key states behind on this front are Assam (with 41% target achieved), Jharkhand (10% achieved), Uttaranchal (10% achieved), Bihar (14%) and West Bengal (22%).