New Delhi: The estimated cost of a parliament building for Afghanistan that India plans to build in Kabul, and a proposed Indian chancery in the Afghan capital has more than doubled because of spiralling violence, which has deterred most companies from bidding for the projects.

In the danger zone: An 8 July photo of an Afghan police officer keeping guard at the main entrance of the bombed Indian Embassy in Kabul. Ahmad Masood / Reuters

According to an Indian official who vetted the project proposals, the total cost of the projects was estimated at some Rs400 crore a year ago. It has now been raised to Rs950 crore. This figure includes the cost of the work to be done by the company selected to execute the projects, preparatory work and allied contracts, which include security arrangements.

“There are only two companies that are now willing to construct these buildings and they demanded a high rate of return taking into account the risk they were taking," said the official, who didn’t wish to be named.

The Indian Embassy in Kabul was attacked by a suicide bomber earlier in July this year, killing 41 people.

The Union cabinet on Thursday approved the construction of Afghanistan’s parliament building and an Indian chancery complex in Kabul, at a revised estimated cost of Rs950 crore.

“The earlier cost was only an estimate," a ministry of external affairs spokesman said. “The new cost was determined on the basis of the tendering process."

The least price was quoted by a consortium led by B. Seenaiah and Co. Ltd (BSCL), the official said, refusing to disclose further details.

An executive with BSCL confirmed that the company had bid for the project. “The cost is bound to shoot (up) because the situation in Afghanistan is very tough. Some of our workers have been kidnapped four years ago and were held hostage for a fortnight. We have to insure our workers at 10-times the price a worker is insured in India," he said.

According to the same executive, eight companies that had shown interest in the project had backed out when it came to submitting bids. The other company in the reckoning for the project is Mumbai-based KEC International Ltd.

The contract is expected to be awarded soon by the Central Public Works Department, a government official said on condition of anonymity.

The construction of the chancery complex is expected to provide a secure and functional base for India’s diplomatic functions in Kabul, minister in the Prime Minister’s Office, Prithviraj Chavan, told reporters on Thursday.

Prime Minister Manmohan Singh, during his visit to Afghanistan in August 2005, had laid the foundation stone for the proposed parliament building.

A ministry of external affairs spokesman didn’t respond to a query for more details on the issue.