KRL and its distributor Indian Oil Corporation (IOC) had decided to suspend supplies to the Kerala government due to non-payment of dues to the tune of Rs 1.25 crore, government sources said on Thursday. This has resulted in excess stock of 1,500 barrels of rubberised tar remaining in KRL godowns. Rubberised tar has a short shelf life compared to ordinary tar.

KRL has an installed capacity to produce 1,500 tonne of rubberised tar while the Kerala government had projected an annual requirement of 15,000 tonne of rubberised tar.

The total requirement of tar for laying roads in the state is approximately 35,000 tonne.

The Union surface transport ministry had advocated large-scale use of rubberised bitumen to arrest the steep fall in rubber prices and also because rubber latex provided more durability to roads. With this objective in mind, KRL started production of rubberised bitumen and IOC took over the marketing of the product.

The Kerala government also had, from time to time, reiterated its commitment to partly protect rubber farmers by resorting to large-scale use of rubberised bitumen for roads. The fact that rubberised bitumen supplied by KRL was costlier by Rs 500 per tonne had caused extra expenditure for the public works department (PWD) department in the state. With the government's financial position not that rosy, payments to KRL were also affected, PWD officials said.