Road contractors to bear own cross

To be liable for defects up to two years post-completion of projects

To nail down contractors engaged in building highways, the Centre intends to make them liable for maintaining the roads for two years after completion of the projects.

In the draft EPC (engineering-procurement-construction) bidding document prepared by the Ministry of Road Transport and Highways, a “defect liability period” clause has been included to make contractors liable for delivery of quality work.

While the defect liability period for roads is two years, it is five years for bridges and foot over-bridges. The maintenance will include rebuilding or repair if the project developed structural damage within this period, a senior official in the Ministry told Deccan Herald.

Besides, the bidding document also stipulates that contractors must deposit a guarantee money equivalent to 12.5 per cent of the project cost with the government.

If the contractor failed to complete the project according to schedule, penalty amount will be deducted from the guarantee money on a day to day basis.

For the first two years, tolling work and maintenance of the highway would be the charge of the contractor. After that, the Ministry would float a new operation, maintenance, tolling contract to be given to a separate player, said the official.

At present, highways built under EPC system are handed over to the government and subsequently the National Highways Authority of India.

Under the new system, contractors will be paid a lump sum to prevent cost overrun. The draft will be sent for Cabinet nod.

The road ministry and Planning Commission failed to see eye to eye on the defect liability period, with the former insisting on a five-year liability and the latter opposing it saying it would encourage contractors to inflate project cost.

As the ministry plans to award around 9,000 km of highways in this fiscal, early finalisation of the EPC document was crucial for the Government to meet the deadline.