PIONEER EDGE NEWS SERVICE/Dehradun
The PMGSY Contractors Association has demanded the withdrawal of additional penalties imposed on contractors for royalty payments and an increase in bitumen rates, citing rising construction costs and financial losses. The association submitted a memorandum to the Secretary, Mining and Industrial Development on October 22, seeking amendments to the existing government orders.
The association president Ramesh Chandra Gahtori on Monday, while addressing the press conference at Press Club said that contractors were facing financial difficulties due to penalties being deducted from their bills despite following the prescribed rules for using locally available construction materials.
In its memorandum, the association stated that rock quarries were not available in every block of Uttarakhand. Further, the Schedule of Rates (SOR) did not provide for transportation costs for materials brought from other blocks. Contractors argued that they should not be penalised for using locally available stones when the prescribed rates already include royalty provisions.
The association also objected to penalties on stones obtained through hill-side cutting, formation cutting and foundation excavation during road construction. It maintained that royalty should be deducted as per existing provisions, but additional penalties should not be imposed on contractors working within their allotted contract areas.
He further demanded a refund of the doubled penalties already deducted from their bills and the immediate withdrawal of the latest circular increasing penalty rates. He also sought the removal of District Mineral Foundation (DMF) deductions, arguing that contractors had not received any direct compensation from the fund for losses or damage affecting their road construction projects.
Raising concerns over rising bitumen prices, he said that the disruption in petroleum supply following the US-Iran conflict and restrictions on the Strait of Hormuz had significantly increased construction costs since March 2026. It cited Himachal Pradesh’s decision to provide an additional payment of Rs 5 lakh per kilometre for roads with a width of 3.75 metres.
He urged the State Government to provide similar relief under PMGSY and implement Clause 54.3 of the Standard Bidding Document (SBD), which provides for relief in exceptional circumstances. Gahtori also demanded that pending bitumen-related contracts be closed without penalties and fresh agreements be issued at revised rates if the Government was unable to compensate contractors for the increased costs.
