High bitumen rates press the pause button on road laying works

High bitumen rates have brought road construction activities to a standstill in several parts of the city, disrupting essential infrastructure projects and leaving residents in a state of uncertainty. Contractors who had begun work on milled roads in areas like Sholinganallur and Ramapuram are unable to proceed further due to the sharp rise in the cost of bitumen, a critical component in road laying. This situation has forced civic bodies to cancel multiple tenders, delaying repairs on roads worth approximately ₹60 crore. The surge in bitumen prices can be traced back to the geopolitical tensions in West Asia, which have driven up the cost of crude oil. As a byproduct of crude, bitumen's price has seen a dramatic increase. For instance, the price of Visco Grade (VG) 30 bitumen, commonly used for smaller streets with lighter traffic, rose from ₹47,852 per tonne in December 2025 to ₹76,852 per tonne in June 2026. Similarly, VG 40 bitumen, used for bus routes and highways with high traffic volumes, saw its price jump from ₹50,342 per tonne in December 2025 to ₹84,772 per tonne in June 2026. Light Diesel Oil (LDO), another crucial input for road construction, has also experienced a steep rise, increasing from ₹59,464 per kilolitre to ₹1,00,444 per kilolitre. Residents affected by the halt in roadworks have expressed concerns about safety and convenience. In Sholinganallur, resident B. Narayanan highlighted the difficulties faced by two-wheeler riders on partially milled roads, noting that the lack of proper surfacing increases the risk of accidents. He urged the government to facilitate the completion of pending works to mitigate these issues. Despite the Greater Chennai Corporation (GCC) instructing contractors to finish the work already initiated, many are hesitant due to financial constraints. Contractors fear that proceeding with the current bitumen prices could lead to insolvency, given the significant investment required for road construction. Consequently, work on 140 roads that require relaying after milling has been postponed. Officials within the civic body are awaiting a potential resolution on July 1, when the State government is expected to announce decisions regarding bitumen pricing. Similar challenges are being faced by State Highway projects, where contractors have reduced their pace of work and even halted some repair activities. One highway contractor noted that the doubling of bitumen prices is unprecedented and has significantly impacted project timelines. Price adjustment clauses in contracts typically apply only to projects lasting over 12 months, making it difficult for shorter-term projects to absorb the increased costs. In response to these challenges, the National Highways Authority of India (NHAI) issued a circular in April specifying that the central government would cover the additional costs of bitumen for ongoing projects after that date. However, contractors still face hurdles in procuring bitumen due to the requirement to pay upfront. Previously, contractors could receive goods before payment, but this practice has changed, adding to their financial strain. With recent reports indicating that crude oil prices have returned to pre-war levels, there is cautious optimism among both contractors and government agencies. They are hopeful that a subsequent drop in bitumen prices might alleviate the current crisis, allowing stalled projects to resume and ensuring smoother transportation for the public. Until then, the situation remains uncertain, with all parties watching closely for any developments that could influence the future of road construction in the region.