States highlight cost and labour concerns

NEW DELHI: As Lockdown 2.0 kicks in from Monday with some relaxations to kickstart the economy, the state governments have flagged concerns over cost escalation of projects, labour availability and provision of food and shelter in ‘green zone’ factories.

Even as the Centre expects state governments to begin certain activities in districts which have not reported any case or have less than five cases, the states have highlighted issues such as cost escalation of projects due to delays and additional responsibilities on contractors like periodic sanitisation of factories and provision of food and shelter on the premises.

The issues were taken up at a meeting of states’ urban development department with the housing and urban affairs ministry — the nodal ministry for the Centre’s four flagship missions. The videoconferencing was attended by 21 states.


According to sources, the UP government spoke about the non-availability of labourers. An official told ET: “Most states said though labour ministry has mapped the availability of labourers, the contractors are reluctant to use a different set. They have asked the administration if a one-time permission can be given to them to ferry their labourers from a neighbouring state.”

The contractors have also sought clarity on the cost escalation. Most contracts have an inbuilt force majeure clause that alters the commitment when an extraordinary event takes place. The states also pointed out that force majeure may not cover Covid-19 like pandemic.

“A majority of contractors have told the state governments that they do not have any space to accommodate workers at factories. Then there is the additional cost of providing food, shelter and toilet facilities while maintaining distancing norms. These have a cost factor and would need to be renegotiated,” said another official.