2021 rate implemented when 2024 should be paid; increased estimated PWD costs 'set back four years'

THIRUVANANTHAPURAM: The estimated amount of public works contract works in Kerala has been increased according to the 2021 DSR rate. The state is sticking to the old rate when the central government is giving the 2024 DSR rate. There are concerns that infrastructure development will be in crisis due to this.

The estimated amount in the state is determined according to the Delhi Schedule Rate (DSR). The increased rate will come into effect on April 1. Currently, Kerala is providing DSR at the 2018 rate. The DSR rate is revised by the Center every year, but the state does not provide it. Kerala has the lowest public works cost estimate in the country. The DSR rate includes the cost of road and building construction materials such as cement, tar, bitumen, and wire.

There were complaints that paying the old rate, even though the price of construction materials had increased by more than one and a half times, would affect the quality. Following this, local bodies and contractors had demanded that the DSR rate for 2024 be paid. However, the Finance Department fixed the rate in 2021 due to fear of financial liability. The cost of construction materials is also taken into account when calling tenders for buildings, roads, bridges, etc.

Until 2013, the KSR rate in Kerala was based on market prices. Contractors complain that the government is not fulfilling its promise to pay the rate for the corresponding year. Although the Public Works Department took a stand to switch to the KSR rate, the Finance Department did not give in.

6,500 for a barrel of tar that costs Rs 11,000

• Kerala pays Rs 6,500 for a barrel of tar, according to the 2018 DSR
• The tar price is Rs 8,000 according to DSR of 2021
• Oil companies charge Rs 11,000
• Tamil Nadu and Telangana states pay the market price

'The agreement between the Public Works Department and the contractors was to implement the KSR of 2025. That was sabotaged. This will adversely affect infrastructure development".

- Varghese Kannampally,

President of Kerala Government Contractors Association