The present invention provides a wet process for blending PVC pipe waste with bitumen so as to produce a modified  bituminous composition useful for paving applications. PVC is not compatible with bitumen, therefore to make a homogeneous blend,  waste PVC was initially treated with a chemical and then blended with bitumen. The viscosity temperature relationship of the PVC  modified binders was studied. The visco-elastic properties of the bitumen-PVC blend were studied and compared with those of  unmodified bitumen. Later, the performance characteristics of bituminous mix made up of these modified binders were also studied  and compared with those of conventional bituminous mix. The results indicate that PVC pipe waste can be used successfully in road  construction. Strength and stability of the mix increased after incorporation of PVC pipe waste. It was also observed that addition of  PVC pipe waste showed increased resistance to permanent deformation in terms of rutting.