Raw material price hike hits Life Mission project

August 4, 2023

THIRUVANANTHAPURAM: The government’s apartment complex project under its ambitious Life Mission project has hit a roadblock as work on most of the complexes have come to a grinding halt as contractors have demanded more funds citing indiscriminate rise in price of raw materials. Only four of the 29 sanctioned apartment complexes have been completed till date.

As per the government details accessed by TOI which was prepared for a review meeting of the project held last week, it was said that the price of steel – which is used abundantly in the construction of apartments using prefab technology – had increased steeply. Because of the price increase, the whole construction cost has exceeded by more than 50% of the originally fixed cost and the contractors have stopped construction citing this reason.

As the issue has a major financial implication on the exchequer, the government has constituted a technical committee under the chairmanship of the chief engineer of LSG department, which has now given necessary recommendations to the government in this regard. The committee’s recommendations are under the consideration of the government.

Of the 29 apartment complexes that have been sanctioned, only the ones in Punalur (Kollam), Karimannur (Idukki), Vijayapuram (Kottayam) and Kadambur (Kannur) have been completed and 174 families stay there. The work of the remaining 25 complexes (supposed to house 1201 families), are in various stages of construction, mostly foundation works.

With regards to individual houses under the mission, the progress is not good. In the latest phase of the mission (Life 2020) 3,69,262 families were found eligible and an agreement for housing was inked with only 60,346 families (16.34%).

Under the mission, for individual houses a sum of Rs 4 lakh is granted to a beneficiary which is released in multiple instalments. As per government estimates, the government will need Rs 14,406.88 crore to disburse money to all eligible beneficiaries under Life Mission.

Of this lot, Rs 3,300 crore is the government’s share, Rs 3,329.88 crore is the share of local bodies and Rs 7,777 crore is the loan that must be raised by local bodies. Though the loan is planned to be availed from Kerala Bank, local bodies have to give bank guarantees (which can be assets or own funds of the local body). But, most local bodies do not have documents of their assets or do not have sufficient funds for a bank guarantee. These factors are causing another stalemate in the smooth progress of the mission.

  • Published On Aug 4, 2023 at 06:00 PM IST

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