W Asia war hits UP roads: Bitumen price surge hampers asphalt laying
LUCKNOW Geopolitical tensions in West Asia have reached the roads of Uttar Pradesh, slowing down approximately 70% of ongoing road construction and repair works. A severe disruption in the global supply chain, triggered by the US-Iran war, has caused the price of bitumen, a crucial binding agent in road construction, to surge by a staggering 65% since February.
Bitumen, which was priced at ₹53,150 per metric tonne (including GST) in February, has skyrocketed to around ₹89,859 per metric tonne.
Consequently, construction agencies are being forced to abandon the asphalt-laying phase immediately after completing base preparations due to the unsustainable escalation in costs.
Authorities acknowledge the issue. "We are taking steps on this issue. The circular from government of India is already there and clear on the situation," said principal secretary (PWD) Ajay Chauhan.
The matter was raised by the Diploma Engineers' Sangh (DES), a body of government engineers in state, with the chief minister's office. "A surge in prices of bulk bitumen VG-10 is a significant issue for road construction as contractors may be inclined to use less bitumen or poor quality bitumen in road construction due to price rise," said DES president ND Dwivedi.
Disruptions to the global supply chain, triggered by US-Iran tensions, have led to severe shortages and price hikes in petroleum products, impacting ongoing road construction projects across the state.
"The miinistry of road transport and highways has worked upon solutions to meet this crisis that may extend for the next few months…similar solutions can be worked upon in UP," stated Dwivedi in his letter to the CM office.
To address this issue, the Public Works Department (PWD) has decided to compensate for the increased cost (the price differential) of asphalt. A Cabinet proposal has been drafted for this purpose.
The department has proposed providing compensation for the increased costs incurred on works executed between April 1 and June 30, which has been done by the MORTH as well.
The MORTH has issued a circular for adjusting the price rise for engineering procurement and construction (EPC) and hybrid annuity model (HAM) projects having provisions of price escalation.
"It is proposed to pay, as a measure of relief, price adjustment for abnormal increase in the prices of bitumen in respect of short-term maintenance contracts (STMC), item rate and EPC contracts of less than 18 months duration, where no price adjustment mechanism has been provided. For the surge in bitumen prices, price adjustment is proposed for the period April 1 to June 30, 2026, for contracts having bid due date before April 2026," stated the MORTH circular sent to all its offices.
The UP Thekedar Kalyan Samiti (UPTKS), association of contractors, working on road construction projects has demanded that the PWD restarts its own stores and provide bitumen to contractors having work tender till the crisis exists. "This will ensure there is no delay in completing the work," said Sharad Singh, president of UPTKS, in a letter to the PWD HoD.
UP has sanctioned ₹34468 crore for roads and bridges construction in budget 2026-27. "There are provisions under EPC projects for relaxation to meet price rise. Government of India has issued a circular and we are working on the situation to take care of prices," said Chauhan. In several states spike in prices has forced contractors to delay projects, including Himachal Pradesh, where costs have nearly doubled.
The PWD maintains 10,214 km of state highways, 6395 km of major district roads, 56,858 kms of other district roads and 1,93,581 km of village roads. New roads are sanctioned every year and with major proposals having already come from MLAs and MPs, work on these proposals have either begun or will begin in May.
Bitumen is produced in oil refineries as the heavy, viscous residue left over. Lighter components like gasoline and diesel are vaporised, leaving the heaviest, at the bottom, which is further refined and sometimes air-blown to improve durability and heat resistance. A bitumen road, uses a binder made of bitumen (a sticky, black, semi-solid petroleum byproduct) to hold together aggregates like crushed stone, gravel, and sand.
Key Insights
- This topic is currently trending
- Experts are closely monitoring developments
- It may impact future decisions
