Mega Construction Projects-Planning for a Zero Dispute Implementation and Legalities of Construction Contracts
Dr D. G. Kadkade, Chief Adviser, Jaiprakash Associates Ltd, New Delhi
India has achieved a GDP growth of about 10% and desires to maintain/ accelerate it during the ongoing Five Year Plan. The main issues which need to be addressed are: (1) political will at state and central governments level, (2) evolving an equitable contract document to enable the executing authority to resolve disputes during the pendency of the contract. If this is achieved then the cashflow required for speedy execution could be maintained thereby executing the job expeditiously.
Contractor quotes his rates based on all costs as on the date of tender with suitable provision for overheads, supervision and profit. He does not do any speculation of probable increase in inputs due to reasons beyond his control. So long as the owner understand this situation, he will get the best price. There will be speedy implementation of project due to no adverse cash flow during the pendency of execution of the job. Having done this, the rates will be best without any cushion for neutralizing imponderables. In order to achieve this end result, risks and costs arising out of central/ state governments policies like increase in rate of taxes and duties, promulgation of new taxes etc. should be neutralized by suitable provision in the contract document. Also increase in all costs arising out of rise in crude oil prices and other major materials incorporated in works should also be neutralized by a suitable provision in contract document.
India has achieved a GDP growth of about 10% and desires to maintain/ accelerate it during the ongoing Five Year Plan. The main issues which need to be addressed are: (1) political will at state and central governments level, (2) evolving an equitable contract document to enable the executing authority to resolve disputes during the pendency of the contract. If this is achieved then the cashflow required for speedy execution could be maintained thereby executing the job expeditiously.
Contractor quotes his rates based on all costs as on the date of tender with suitable provision for overheads, supervision and profit. He does not do any speculation of probable increase in inputs due to reasons beyond his control. So long as the owner understand this situation, he will get the best price. There will be speedy implementation of project due to no adverse cash flow during the pendency of execution of the job. Having done this, the rates will be best without any cushion for neutralizing imponderables. In order to achieve this end result, risks and costs arising out of central/ state governments policies like increase in rate of taxes and duties, promulgation of new taxes etc. should be neutralized by suitable provision in the contract document. Also increase in all costs arising out of rise in crude oil prices and other major materials incorporated in works should also be neutralized by a suitable provision in contract document.
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NBM&CW January 2011
