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LATEST NEWS UPDATES | ‘Blacklist non-performing contractors' by K Balchand

‘Blacklist non-performing contractors' by K Balchand

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published Published on Mar 22, 2011   modified Modified on Mar 22, 2011
A Parliamentary Standing Committee has directed the Union Ministry of Road Transport and Highways to blacklist all non-performing contractors, holding them responsible for the twin malaise of delays and prevalence of corruption in execution of road projects.

The committee on transport, tourism and culture headed by Sitaram Yechury (CPI-M), did not rule out the possibility of a nexus among middlemen, bad contractors and corrupt officials for the delay in projects and observed that corruption was prevalent due to ineffectiveness of the existing mechanism in the Ministry. It recommended a review of the prevailing anti-corruption mechanism and putting in place a more effective one.

According to the report, 19 foreign and Indian contractors, including a Central public sector undertaking (CPSU), have been listed as non-performing and delaying the execution of 36 major road projects in the country.

In contrast, the Ministry has blacklisted only one firm so far for non-performance.

The six non-performing foreign firms are — Bhumihighway Venture Berhad, Malaysia; Centrodorstroy, Russia; China Coal Construction Group Corporation, China; Dolomite Industries Co. Sdn Bhd, Malaysia; Sticco, Kingdom of Saudi Arabia; and You-one Engineering Construction Co. Ltd., Korea. The non-performance of these foreign firms has affected the progress of ten major national highway projects.

The 13 Indian firms put under the non-performing category are — Ashwani Construction Company; A.L. Sudershan Construction Company Limited; APIL (Subsidiary of Afcons Infrastructure Ltd.); Bhagheeratha Engineering Ltd; DD Builders Ltd; Essar Group; Lanco construction; Rani Construction; Progressive Construction Ltd; M. Venkat Rao Engineering; Prakash Atlanta JV and its directors; Maharaia; and IRCON International Ltd., a CPSU. Because of these firms, 26 road projects stand delayed.

The Ministry has taken the stand that the non-performing contractors are “liable for penalty in the form of liquidated damages stipulated in the civil work contract for delay in completion of the project”. Once on the “non-performing” list, they stand barred from pre-qualifying for future contracts as per the policy of the National Highways Authority of India till a subsequent review finds improvement in their performance. The Ministry has promised a review of its policy in the wake of the panel's recommendations.

The Hindu, 22 March, 2011, http://www.hindu.com/2011/03/22/stories/2011032264550700.htm


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