Mumbai roads: Contractors will now be paid only after clearing quality checks

Updated: Dec 03, 2016, 15:03 IST | Ranjeet Jadhav |

PWD passes GR to use new model to ensure contractors paid majority only after clearing quality check in 2 years

The rocky road on the Western Express Highway continues to be a treacherous navigation. File pic
The rocky road on the Western Express Highway continues to be a treacherous navigation. File pic

Optimism is the word of the day as the Public Works Department hopes that it can improve the state of its over 90,000 km of road network in Maharashtra by applying the Hybrid Annuity Model; previously successfully deployed by the Central government.

Change of heart
To that end, the state government passed a Government Resolution (GR) on November 29 (mid-day has a copy), stating the roads and bridges under the jurisdiction of the PWD should henceforth be constructed using this model.

"At many places, the condition of PWD roads is really bad and repairs become mandatory every five years. However, in most cases, the road quality has gone beyond repair and they need to be rebuilt altogether, so the use of the Hybrid Annuity Model will prove helpful as a contractor will have to ensure quality work to get his full payment,” said a retired PWD official.

Currently, the PWD roads are constructed using the Engineering Procurement Construction (EPC) model, wherein the entire amount required for the construction of the road is given straightaway, thus allowing the contractor to get away with sub-standard quality work, say experts.

Pilot basis
To deploy on a pilot basis, the PWD will now use the Hybrid Annuity Model for the construction of 10,000 kilometres of road for a period of two years. Put simply, if the ratio split is calculated, once the contractor bags this award, while the state will spend 40 per cent of the cost, the contractor will have to invest the remaining 60 per cent on his own, which will be repaid after it passes quality check after two years. Thereafter, the contractor will have to make the remaining roads also as per the standards of NHAI.

Experts hail shift
Welcoming the move, transport expert Jitendra Gupta said, β€œIt’s a really good idea because this will help in getting better quality roads. But, at the same time, there needs to be a provision for a third-party audit that should be done to check the quality of roads constructed and that if bad quality roads are built, action can be initiated against the contractor as well as the officials.”

What is the Hybrid Annuity Model?
As per the model, a contractor handling the construction of a road, will only be paid 40 per cent of the road cost as the fees. The remaining 60 per cent will be released two years after the project is completed, depending on the quality of the road. Transport experts feel that the use of this model will help in getting better quality roads as the contractor will refrain from compromising on quality if his majority payment depends on it.

3L km
Total road network in state, including those under NHAI, MSRDC, PWD and local bodies

90k km
Road network under the jurisdiction of PWD

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