Business Daily from THE HINDU group of publications
Saturday, Jul 11, 2009
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Business Daily from THE HINDU group of publications Saturday, Jul 11, 2009 ePaper | Mobile/PDA Version | Audio | Blogs |
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Industry & Economy
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Infrastructure Government - Policy States - Tamil Nadu TN to allow cost escalation in contracts
This GO will be in force for one year on a trial basis. 
Risks of delay: The unfinished Rajiv Gandhi road, near Sholinganallur, on the outskirts of Chennai, poses risk to commuters.— Our Bureau Chennai, July 10 The Tamil Nadu Government has passed an order to provide for cost escalation in contracts to avoid delays in project execution. It is also trying out a new system for road maintenance contracts that will focus on road user satisfaction as a gauge of quality. Moving the demand for grants to Highways and Minor Ports Department, the Minister, Mr M.P. Saminathan, said the State Government has passed an order (GO MS 101 dated June 10, 2009) that provides for price adjustment of all components in tenders of more than Rs 1 crore with a contract period of more than 12 months. On smaller contracts, price adjustment will be applicable to cement, steel, bitumen and petrol, oil and lubricants. This GO will be in force for one year on a trial basis. According to the policy note for 2009-10, the State Government is bringing Performance Based Maintenance by Contract (PBMC) with World Bank aid for maintaining roads for a five-year period. The World Bank has approved four roads, totalling a length of 314 km, to be tendered out under the new system. The draft agreement documents have been sent to World Bank for approval. The new system is different from the conventional operation and maintenance contracts. In the traditional system the emphasis is on quantity of materials, unit-price, equipment and labour. Under performance-based contracts, the maintenance is gauged on customer-based performance, smoothness of road, safety features and aesthetics. More Stories on : Infrastructure | Policy | Tamil Nadu
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