Odisha State Roads Project faces Rs 624 cr cost overrun

World Bank funded Odisha State Roads Project (OSRP) is suffering a cost escalation of Rs 623.68 crore, marred by delay in work execution by contractors.

The total project cost which was initially estimated at Rs 1431.19 crore has now been revised to Rs 1938.6 crore in accordance with a restructuring proposal prepared by the state government as per the stipulations and guidelines of the bank.

The restructuring plan has been duly considered and approved by the state level empowered committee constituted to oversee the implementation of OSRP.While the loan component has been kept unaltered at $250 million, the incremental amount of Rs 623.6 crore will be borne by the state government. Financing was to the extent of 80 per cent of the total project cost.With the restructuring proposal ready, the state finance secretary J K Mohapatra has written to the Union finance ministry to move World Bank for approving the proposal and lift the suspension on project funding.

Blaming the contractors for delay in execution of civil works, Mohapatra held that the performance of the contractors was not at all encouraging, forcing the state to initiate action for termination of contracts for the packages-1 and 2 of Phase-I civil works that were awarded in early 2009.OSRP was to be implemented during 2009-10 to 2013-14.

Outlay under OSRP for 2011-12 was fixed atRs 100 crore of which the state spent Rs 74.96 crore. Plan outlay for the project has been pegged at Rs 105 crore for the current fiscal.