03 May 2004	Monday	12 Rabi-ul-Awwal 1425

PESHAWAR, May 2: The NWFP government has approved 15 per cent premium on the sanctioned estimated cost of construction work, accepting a long-standing demand of contractors, official sources told Dawn.

They said that the rate advisory committee of the provincial government composed of representatives of the finance and other departments concerned approved a 15 per cent premium for contractors in fulfilment of their demand.

The premium, maintained the sources, would be paid over and above the sanctioned estimated cost of development work involving construction of buildings, roads, etc.

The move, the sources added, would lead to an increase in the cost of projects in comparison with the original estimated cost. Development planners and finance managers of the province conceded that the move was long overdue on the part of the government as contractors were incurring financial losses because of increase in prices of construction material and transportation cost.

"This would end the long-existed deadlock between the provincial government and contractors over the issue of increasing the consolidated scheduled rates (CSR)," said a development planner.

The provincial government's authorities and private contractors were at the loggerheads for quite some time over the question of revising the CSRs - the consolidated rates against which contractors are awarded contract for the execution of public sector schemes involving construction work.

Contractors in several parts of the province had, in the recent past, resorted to protest by stopping construction work to force the government to revise the rates.

They were of the view that rates should be revised upward because the cost of construction had registered a substantial increase since the time they were fixed about five years ago.

The contractors' protest, added the sources, lent a serious blow to the provincial government's endeavours to improve the ratio of development expenditure to achieve the target of spending Rs14.6 billion under its current financial year's annual development programme.

The sources maintained that the tussle between the government and contractors forced the public sector development agencies to advertise new projects for the purpose of inviting bids from the private sector contractors more than once in several instances.

"Nobody from among the contractors showed interest in the construction work, causing difficulties for executing agencies in respect of awarding contract for different types of work," added the source.

Though CSRs had not yet been revised upward, the rate advisory committee of the provincial government, said the sources, had approved a 15 per cent premium, accepting the contractors demand.