New Delhi: In the wake of rising steel prices, railways has revised its contract clause to avoid adverse effect on progress of its infrastructure projects besides insulating contractors from vagaries of the market.
Rising steel prices have adversely affected many ongoing railway projects across the country. “We have revised the price variation clause for all our future projects so that work does not suffer due to abrupt market fluctuation,” said a senior Railway Ministry official.
Though every contract has a price variation clause, it can absorb only 10 to 15% price rise in the market. “Since the cost of steel has risen upto 45% over the accepted rates, the provision in the existing clause does not compensate contractors fully,” said the official.
A delegation of leading contractors involved in Railway projects had recently met senior officials in the ministry.“They expressed their helplessness in completing the work unless they were compensated for the steep hike in steel prices and had sought a change in the existing price variation clause. So the clause was revised accordingly taking into account the actual price variation,” said the official.
However, the revised clause will be applicable for future projects only and not for the ongoing ones.