The price for some materials, especially cement, steel, and asphalt, was substantially adjusted during implementation. Large-scale price eslalation led the contractors to slow down the work. Since the standard contract period for the Pradhan Mantri Gram Sadak Yojana (Prime Minister's Rural Roads Program) works is only 12 months, provision for price escalation is not included in the civil works contract. This means that if the works take longer than 12 months for any reason, price escalation potentially becomes an issue. Future project preparation and implementation should consider price escalation and/or adopt special clauses applicable when the work is extended to more than 12 months.
MFF - Rural Roads Sector II Investment Program (Subproject 1)