The huge cost escalations over the years in various projects such as the Basic Services to the Urban Poor (BSUP) and the Rajiv Awas Yojana (RAY) are likely to add to the financial burden of the city Corporation. The time gap between the approval of the detailed project report (DPR) of a project and its actual execution adds much to the final cost. The Corporation has to bear the difference in cost.
A case in point is that of the BSUP project to redevelop the Karimadom Colony, the third phase of which is set to start on November 20. When the DPR for the project was approved in 2007, the costs were calculated based on the schedule prepared in 2004.
As per this, the estimated cost for a building block consisting of 20 houses was Rs.34 lakh. But when four such blocks were completed as part of the first phase of the project in 2010, each of them cost Rs.64 lakh. By the time the second phase consisting of three blocks was completed in 2011-12, the cost had risen to Rs.78 lakh.
BSUP officials at the Corporation said the third-phase costs could touch Rs.1 crore. But no change was possible to the DPR once approved, and anything above Rs.34 lakh a block would have to be paid from the Corporation’s own funds.
The major item adding to the cost escalation is the rising cost of building materials. BSUP officials said even not-so-obvious factors such as type of soil added to the cost.
Surveys
“The time available to the consulting agency for DPR preparation is very less, and various types of surveys such as social survey and topographical survey need to be conducted in this time period. So, sometimes factors such as type of soil are filled in without carrying out detailed studies. At the time of construction, these factors come into play, and if the soil type is different, we end up changing the foundation type, thus adding to the cost,” an official said.
This factor is crucial in the case of Karimadom Colony, which has swamp like areas that need special foundations.
The costs also shoot up by the time the project proposal is accepted. The identification of beneficiaries and the controversies surrounding it add to the delay in the implementation of the project. The third phase of Karimadom has already been delayed by about eight months on the issue of beneficiaries.
Another delay has been in the building of transit facilities for the families who have to be evacuated for the construction to begin. Instructions are now being given to adhere to strict timelines for the completion of the project to prevent further cost escalation.
