Several ongoing state and national highway projects across Tamil Nadu have slowed down or faced disruptions due to a shortage of bitumen and a sharp increase in its prices amid the ongoing West Asia crisis.
According to The New Indian Express, officials in the state highways department said projects involving road widening, relaying, new road construction and routine maintenance have been affected as oil marketing companies have reduced supplies of the key road-construction material.
Major road development schemes affected
Among the projects impacted are works being carried out under the Chief Minister’s Road Development Scheme, the Chennai-Kanniyakumari Industrial Corridor Project and the Chief Minister’s Village Roads Development Scheme.
These projects include conversion of two-lane roads into four-lane corridors, upgrading intermediate roads into two-lane stretches with paved shoulders and construction of new road infrastructure across the state.
Industry sources said the supply disruption is linked to challenges in sourcing the specific crude oil varieties required for manufacturing Viscosity Grade (VG)-30 bitumen, the most commonly used grade for highway construction projects.
“VG-30 grade bitumen is the most widely used material for laying state and national highways as well as roads in Chennai city,” said an official from an oil marketing company, according to The New Indian Express.
VG-30 bitumen prices nearly double
Officials said the supply situation has become more challenging following changes in crude procurement patterns triggered by the West Asia conflict.
“Due to the West Asia war, crude oil is now being sourced from more than 10 countries across the world. However, the crude oil currently procured from certain countries is not yielding the VG-30 bitumen required for road projects. The overall functioning of refineries, however, remains unaffected,” the official added, according to The New Indian Express.
Bitumen manufacturers, including refineries in Chennai, Kochi and Visakhapatnam as well as private sector facilities, produce VG-10, VG-30 and VG-40 grades of bitumen from processed crude oil.
While VG-10 is generally used for rural road construction, VG-40 is primarily deployed in airport runway projects. VG-30 remains the preferred grade for most state highway, urban road and national highway works.
Contractors seek cost revisions as project costs rise
According to industry estimates, the price of VG-30 bitumen has risen sharply from around Rs 45,000-55,000 per tonne before February to nearly Rs 95,000-1,05,000 per tonne currently.
The steep increase in raw material costs has added financial pressure on contractors executing road projects across Tamil Nadu and has contributed to delays in project implementation.
“When contractors submit proposals seeking revision of project costs, citing the increase in bitumen prices, the state may consider the request only if the contractor is executing the work within the agreed contract period. If the contractor has exceeded the agreement period, the request for cost revision may not be considered,” a senior highways official said.
Officials said the combined impact of supply constraints and rising prices has emerged as a significant challenge for road infrastructure projects, with authorities monitoring the situation as global crude oil markets remain volatile.