Contractors stay away due to low govt rates

Hyderabad February 22: Contractors are not keen to execute chief minister K Chandrasekhar Rao's ambitious double-bedroom (2BHK) project in the current fiscal, but the govt is still going ahead with plans to showcase how it would be taken up in a big way in 2017-18 in the ensuing budget.

Govt sources believe this move would send a positive signal to the public about TRS commitment to implement KCR's promise.

Housing minister A Indrakaran Reddy now wants to project in the budget that 1.33 lakh double-bedroom houses in 95 Assembly constituencies (excluding GHMC) would be built in 2017-18 with each assembly segment housing 1,400 units.

These 1.33 lakh houses are in addition to the 2 lakh double-bedroom houses planned for GHMC, and the housing department wants Rs 3,000-5,000 crore in the ensuing budget for it.

As of now only 1,400 houses of the total 60,000 sanctioned in the current fiscal have been finished. What's more, officials have drawn only Rs 1,600 crore of the Rs 7,844 crore sanctioned by HUDCO for the project after contractors did not come forward to execute as they found the price fixed by the state to be far lower than the market value.

"If the state draws the total money, then it has to start repayment of both the principle and interest component of loan. Why would the state do it when contractors are not willing to participate in the double-bedroom project and most of them are happy executing work under Mission Kakatiya and Mission Bhagiratha," a senior official said.

But officials are confident that this time the project would take off in a big way as tender norms have been relaxed and small and local contractors also included.

Housing Department engineering in chief S Eshwaraiah said that the fixed security deposit (FSD) has been cut from 7.5% to 2.5% and earnest money deposit (EMD) slashed from 2.5% to 1%. "Sand too is being offered free for the project by the government," he added.