Alarm spreads among road-builders as Iran war bitumen shortage bites

{"text":[[{"start":11.6,"text":"Indian Prime Minister Narendra Modi’s flagship road-building push faces widespread disruption and delay as the US-Israeli war on Iran chokes off supplies of essential bitumen."}],[{"start":22.799999999999997,"text":"A collapse in shipments from the Gulf of bitumen — the thick, viscous hydrocarbon used as a binder in asphalt — is causing increasing concern in countries from Italy to Australia, where shortages are adding to the cost and complexity of combating potholes. In South Korea, some local authorities have been slowing down road construction."}],[{"start":42.849999999999994,"text":"The alarm is particularly acute in India, which has a government target of building 100km of highway a day and which imports about 40 per cent of its bitumen, almost all of it from the Gulf. Analysts at India Ratings and Research have warned of mounting “cost escalations and execution delays, especially for state and regional road projects dependent on imported bitumen”. "}],[{"start":66.35,"text":"Exports of bitumen from Gulf ports to India fell to 7,000 tonnes in March from 32,000 tonnes in the same month last year, according to Kpler data."}],[{"start":null,"text":"

"}],[{"start":76.44999999999999,"text":"At least 17 ships that were scheduled to take bitumen cargoes to India were stranded in the Gulf at the beginning of the Iran conflict, though a few have since managed to leave, the data also showed. "}],[{"start":87.89999999999999,"text":"PC Grover, director-general of India’s National Highways Builders Federation, told the FT that “quite a few” smaller companies had only been receiving two out of 10 scheduled truckloads of bitumen. "}],[{"start":99.8,"text":"The sharp drop in shipments from the Gulf has highlighted the vulnerability of India’s economy and vast infrastructure development programme to the near-halting of shipments through the Strait of Hormuz. "}],[{"start":110.35,"text":"Those shortages are biting at a politically sensitive time for Modi’s Bharatiya Janata Party, which has been contesting elections in opposition-run states, including Tamil Nadu and West Bengal."}],[{"start":121.8,"text":"India Ratings and Research estimates that bituminous works typically account for 8-12 per cent of the cost of public-private partnership projects awarded by the National Highways Authority of India."}],[{"start":133.45,"text":"Inflation-linked payment structures provided some cushion for contractors on national schemes, but those on state and regional projects were more vulnerable as they had limited inventories and other procurement buffers, the Mumbai-based rating agency said. Materials shortages could delay some projects past the main February-June building season and into India’s monsoon, it said."}],[{"start":156.25,"text":"Roadworks in states including Goa, Kerala and Rajasthan had already been stalled or delayed, according to Indian media. "}],[{"start":null,"text":""}],[{"start":164,"text":"The NHBF, which represents India’s largest infrastructure companies including Larsen & Toubro and Tata Group, has sent two letters to India’s road and transport ministry this month complaining that bitumen prices have soared more than 50 per cent since February."}],[{"start":181.4,"text":"Government moves to allow extra payments to contractors on certain short-term projects were too narrow and companies needed a more “comprehensive” relief package to mitigate the “severe financial stress across highway projects”, the highway builders’ lobby group said."}],[{"start":194.3,"text":"Grover said it had yet to receive a reply to its latest letter sent on Tuesday and contractors were in “distress” after being hit by the “hike in price as well as short supply” of bitumen."}],[{"start":206.3,"text":"The road and transport ministry did not respond to a request for comment."}],[{"start":210.5,"text":"In South Korea, local media have reported that numerous road construction projects have been delayed, including the 3km-long Sindo Peace Bridge in the western city of Incheon, amid supply disruption and soaring prices for asphalt concrete."}],[{"start":225.35,"text":"In Italy, contractors have also begun complaining to local authorities about surging costs and asking for adjustments to their contracts."}],[{"start":233.1,"text":"“We are observing some pressures related to rising material costs, particularly for inputs such as steel and bitumen,” Stefano Lo Russo, the mayor of Turin, told the FT."}],[{"start":244.4,"text":"“The main impact concerns road maintenance and resurfacing works,” Lo Russo said."}],[{"start":249.55,"text":"He said the situation in Turin was “under control”, but that future roadworks in Italy “could depend on how cost frameworks evolve”."}],[{"start":257.15000000000003,"text":"Additional reporting by Daniel Tudor in Seoul and data visualisation by Janina Conboye"}],[{"start":270.85,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1777355931_8431.mp3"}