Shimla: Cost overruns and delays has forced the Himachal government to restructure the HP State Roads project, with the state cabinet on Friday approving procuring additional financing of US $ 61.7 million from the World Bank and extending the closing date by three years to June 2016.
Presided over by chief minister Prem Kumar Dhumal, the cabinet gave its nod for restructuring the US $ 303.43 million state roads project that was approved on June 5, 2007 and was scheduled to be completed by June 2013.
Under the project 10 contract packages for upgrading 447 Kms of state roads were awarded, however, one contract package of Rs 228.25 Cr for upgrading the 80 Km Theog-Kotkhai-Hatkoti-Rohru road awarded to a Chinese construction company has become disputed and is before the courts.
The contract awarded in May, 2008 was scheduled to be completed by June 2011 but with only about 24 percent of the contract executed, the government has terminated the contract and has moved for invoking the guarantees tendered by the contractor.
Funding by International Bank for Reconstruction and Development (IBRD, a World Bank agency, which initially was $ 220 million would now increase by $ 61.7 million to touch $ 281.7 million and the Indian government share from $ 83.43 million to $ 118.93 million, an increase of $ 35.5 million.