Pune, 9th June 2026: Rising construction costs have disrupted several cement concrete road projects, with contractors claiming that sharp increases in the prices of ready-mix concrete (RMC), diesel, gravel, and other materials have made it difficult to complete work within the originally approved budgets.
According to contractors, many road projects that were expected to be completed within the sanctioned amount have reached only 60 to 80 percent completion. They have approached the Pune Municipal Corporation (PMC) seeking additional funds to finish the remaining work.
The issue intensified after RMC plant operators increased concrete rates following a dispute with the PMC over action against unauthorized plants. At the same time, higher diesel prices and transportation costs have further pushed up the cost of construction materials.
Contractors have cited inflation and revised cost calculations while requesting financial relief. They have also referred to periodic cost revisions undertaken by the Public Works Department (PWD), which updates construction estimates based on prevailing market conditions.
However, PMC officials have maintained that these road projects are short-duration contracts, generally completed within six months, and are therefore not eligible for price escalation benefits. The civic body has refused to provide additional funds and has instructed contractors to complete the projects as per the agreed contract conditions.
Officials said the problem has been compounded by contractors quoting rates significantly below estimated project costs while bidding for civic works. In some cases, bids were submitted at 30 to 40 percent below the PMC’s estimated cost.
With construction material prices rising sharply in recent months, many contractors are now finding it difficult to execute projects within those commitments.
"Although construction costs have increased, contractors are required to complete 100 percent of the work. There is no provision for granting price escalation benefits for short-term projects. If contractors fail to complete the work as per the contract, action will be taken against them. We have also not received any revised directive from the PWD regarding such compensation," said Rajesh Bankar, Head of PMC's Road Department.
