Madras High Court Seeks Government Response on Rising Construction Material Costs

The Madurai Bench of the Madras High Court has acted on complaints about the exorbitant prices of construction materials in Tamil Nadu. The court, in response to a public interest litigation (PIL) filed by Periyakiluvachi Kandasamy, a civil contractor from Sivagangai district, has issued notices to the principal secretary of the housing and urban development department, the commissioner of the town panchayat and the municipal corporation, the chief town planner, besides the director of town and country planning, requesting an explanation and possible regulatory measures on the issue.

Kandasamy, who enters into government construction contracts, pointed out that rates of basic materials such as ‘M’ sand, gravel and stones have skyrocketed arbitrarily in the Sivagangai and Pudukottai districts. Longer-term, he noted, such fluctuating price jumps have generated major hardship for contractors attempting to carry out projects for which they signed contracts, in some cases more than a year ago. In some instances, he cautioned, the financial burden could even threaten contractors’ livelihoods.

Kandasamy said in his petition that the government should make sure that contracts in the process are executed with material prices agreed upon before the contracts and do not face sudden increases. He also demands the constitution of a state-level regulatory committee to monitor and regulate the rising prices of key construction materials, including quarrying materials and iron. Also, he requested the Tamil Nadu Mineral Resources Department to properly convey information to the contractors on any price change when they participate in the auctions of the government.

Noting the gravity of the matter, a division bench of Justices Nisha Banu and S. Srimathi has ordered the Principal Secretary of the Department of Mineral Resources, the Commissioner and the Collectors of Sivagangai and Pudukottai districts to file a report mentioning the present status. The deadline for their response set by the court is March 25.

The case has attracted renewed scrutiny of the financial precariousness contractors face amid unregulated flares in the construction industry. The court’s decision dashes these hopes, but it is a glimmer of hope for pharmaceutical regulation and pricing reform.