Government to stop 'rate riot' by departments for construction works

Various government departments have been fixing their own rates for construction work, resulting in a loss to the state exchequer.

With the state government facing objections during audit of such work, the Finance Department has decided to put an end to the practice.

Different departments, which have set up their own construction divisions, have been notifying the Schedule of Rates (SR) — which are simply rates of materials, wages of workers, hire charges of machinery and others — on an annual basis. This despite guidelines that stipulated entrusting the work to the Public Works Department (PWD).

For instance, if one department fixed Rs 5,500 for a tonne of cement, another would fix the SR at Rs 6,000. This, sources say, benefited a few contractors and resulted in losses to the exchequer.

B Guruprasad, secretary to government, PWD, told DH that two committees were formed to standardise the SR.

While one committee under additional chief secretary, PWD department will be the authority to approve any SRs, another technical working group will compile the SRs, perform data analysis and identify the duplication of common items in different SRs and fix a common price for such items, he said. The new common SR is expected to be operational from April 1, 2020.

According to sources, the department has compiled more than 50 SRs of various departments, boards and corporations, and is expected to come out with a common SR soon. An announcement was also made in the Budget recently.

The working group will also finalise the agencies responsible to fix prices for works. For instance, SR of works related to power projects will be set by one nodal agency rather than separate SRs for Karnataka Power Corporation Ltd, Karnataka Power Transmission Corporation Ltd,
Bescom etc.

The number of departments executing construction works had grown exponentially over the past decade, compared to the handful of departments that took up such projects.