Labour cost for highways construction rises by 18% in last two years: NHAI

NEW DELHI: The labour cost for highways construction has seen a steep 18% rise in last two years, the construction cost index for the month of September released by National Highways Authority of India ( NHAI) showed.

The base for this index has been taken at 100 for April 2013. The total cost of construction of highways has gone up by 7.7% since April 2013.

The index compromises of material, equipment and labour cost received from contractors and concessionaires. The cost of land is not considered for the index.

The applicable project cost is important since the government pays this to the private operator, with interest, in the form of a half-yearly annuity as a part of the hybrid annuity model.

After the government found out that WPI was not comprehensive enough to settle claims in the road sector, it was decided to have a separate index for road sector which would factor in all relevant components.

The material cost has been calculated at 105.8 and equipment cost at 107.4 for the month of September, 2015.

The index has been released on experimental basis and NHAI has called for suggestions and response to make the data more comprehensive. When companies quote a cost figure for bagging a project, this index would be eligible for revision based on changes in the price index.