March 26, 2008	Wednesday	Rabi-ul-Awwal 17, 1429

RAWALPINDI, March 25: Development projects worth Rs200 billion across the Punjab province have come to a virtual halt as contractors have stopped work on thousands of roads and building infrastructures citing sudden rise in the prices of construction materials.

Federation of Punjab Contractors Welfare Association Senior Vice Chairman Chaudhry Hafeez told Dawn on Tuesday that members of the federation had been winding down their operations as price of steel, cement, fuel, bitumen and wages of labour started rising.

“In the last four months our cost on those counts has increased manifold,” he said.

“The contractors are demanding price variation as per rules and agreements.

However, the surge in the prices has worried the Punjab government authorities also and so far they are undecided whether to compensate the contractors in order to continue work on the development projects or not,” he added.

Mr Chaudhry plans to meet Punjab’s chief secretary and finance secretary in order to discuss the issue. “The more the government delays the compensation, the more would be delayed the welfare projects, causing dissatisfaction to the general public and the politicians,” he said.

“We cannot continue work on the projects when second category steel is being sold at Rs85,000 per ton against its price of Rs32,000 just two months ago. The government must compensate the contractors for the extraordinary hike in the prices of steel and other construction materials,” he said.

Mr Chaudhry said 10 construction materials registered 200 per cent increase in prices in four months, forcing contractors to abandon work on the projects, unless compensated.

In Rawalpindi alone more than 400 contractors have stopped work on development projects worth Rs1.2 billion. The concerned local authorities and the Provincial Building Department have been informed about the gravity of the situation.

So have the district and divisional level authorities to the Punjab government twice.

Former Rawalpindi Chamber of Commerce and Industry (RCCI) president Dr Hassan Sarosh fears “alarming effects” if the development projects were abandoned. He said the government should pay the increased prices to the contractors before they rose further.

Office-bearers of the contractors association are already in Lahore for negotiating with the authorities an end to the deadlock.