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The cost of the New Parliament Building and Vice President Enclave has increased due to factors such as a rise in GST, escalating material costs, higher wages, structural reinforcements, and additional security measures. Initially, Tata Projects secured the New Parliament Building contract at INR 862 crore, lower than the estimated INR 971 crore, while Kamladityya Construction Private Ltd obtained the VP Enclave project for INR 206.5 crore against an estimated INR 214 crore. However, sources indicate that the revised cost for the New Parliament Building is approximately INR 1,200 crore, a 25% increase. Similarly, the VP Enclave's cost rose to around INR 260 crore, following the Delegated Investment Board's approval of additional expenses. The Housing and Urban Affairs Ministry confirmed these escalations in response to parliamentary inquiries but withheld exact revised figures.
The Housing and Urban Affairs Ministry informed Lok Sabha that the costs of the New Parliament Building and Vice President Enclave projects have risen due to an increase in GST, higher material costs-especially steel and cement-wages, structural reinforcements, and additional security measures. Advertisement
When the tender for the New Parliament Building was awarded, the government had claimed cost savings, with Tata Projects securing the contract for INR 862 crore compared to the government's estimated INR 971 crore. Similarly, Kamladityya Construction Private Ltd won the VP Enclave project with a bid of INR 206.5 crore, lower than the estimated INR 214 crore.
The ministry did not disclose the revised costs of these projects, both of which are integral to the extensive Central Vista redevelopment initiative. However, it has not yet responded to queries regarding the updated expenditure. According to sources, the revised cost of the New Parliament Building has surged to approximately INR 1,200 crore, marking a 25% increase over initial government projections. The cost of the VP Enclave has also escalated due to additional work requirements, with the Delegated Investment Board approving an increased expenditure of around INR 260 crore last year.
In response to a query from TMC MP Mala Roy, Minister of State for Housing and Urban Affairs, Tokhan Sahu, stated in a written reply that the cost escalation resulted from multiple factors. These include the GST rate increase from 12% to 18% effective from July 1, 2022, a rise in steel and cement prices, increased labour wages, additional security provisions introduced during project execution, and structural modifications to align with Seismic Zone-V standards for the New Parliament Building.
It was initially reported in January 2022 that while the project was originally designed to meet Seismic Zone-IV requirements, it was later decided that, for enhanced durability, it should conform to Seismic Zone-V standards. Officials have refrained from disclosing the updated cost but have acknowledged that several security enhancements were deemed necessary during construction.
The New Parliament Building, VP Enclave, and the redevelopment of Kartavya Path have been completed. Meanwhile, the ministry has confirmed that three buildings under the Common Central Secretariat (CSS) project, located on the former site of IGNCA, will be completed by May this year, with an additional building under the CSS initiative scheduled for completion by April 2026.
The rising costs of the New Parliament Building and VP Enclave reflect the broader challenges of infrastructure projects, including fluctuating material prices, regulatory changes, and evolving security requirements. With additional government infrastructure developments underway, including the Common Central Secretariat buildings, the focus remains on timely completion while addressing financial and security considerations.
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