Monday, August 29, 2005

Contractors get away with delays, BCC takes no action

Contractors get away with delays, BCC takes no action
New Indian Express

BANGALORE: Inordinate delays seem to have become quite routine for Bangalore City Corporation’s (BCC) projects and one wonders if the civic body has any legal control over the contractors.

The work on Rajajinagar Grade Separator began three years ago, but is still limping and it is not known if deadlines have any sanctity or legal binding on the contractor at all.

What is more outrageous is that no contractor in the BCC history was imposed any penalty for delay. While the BCC gives works to contractors at 30-40 percent higher than the estimated cost, it goes on granting escalation costs to contractors.

Though contractors are bound by a legal agreement with BCC to complete work on time, the agreement has no clause on penalty, said BCC Commissioner K. Jothiramalingam.

“I don’t know why the BCC contract agreements have no clause on bonus and penalty. All other government departments have these clauses,” he admits.

The contractors are not a happy lot either. Every infrastructure proposal passes through as many as 42 ‘tables’ and every table entails a ‘soft cost’ to get the file moving, said a contractor.

After this the proposal moves to the standing committees and the council before BCC sends it to the Urban Development Department.

This ‘soft cost’ and the delay at proposal stage make contractors bid 30-40 percent higher than the estimated cost of the work, sources in BCC engineering department told this website’s newspaper.

The ordeal of the civic work continues even after the proposal is sent to government after BCC selecting a contractor. Without the Government nod, the civic body can not enter into any agreement with the contractor though it has selected one.

Hence the BCC issues a Letter of Intent (LoI) to the contractor and asks him to start work. This throws the time estimate off the track as the time line of the project begins from the date of agreement.

Now the next bundle of troubles begin with contractor denying to start work as the cost he quoted in the original bid have escalated due to all this delay which would have run into an year. Now it is the turn of the escalation proposal to do all the rounds explained above.

By the way the no work on the ground begins as yet.

The commissioner wants to put an end to the pointless delay. “We will introduce penalty and bonus clause to the agreement. While the penalty would deter the contractor from delaying, incentive would encourage him to complete the project ahead of time,” said Jothiramalingam.

But that would necessitate an annual time audit alongside the current financial audit. Is the civic body prepared for it?


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