National Highways_Environment Clearance_ProjectsMonitor

The Ministry of Road Transport and Highways recently made certain changes in the model Engineering Procurement and Construction document for construction of two-lane national highways, with or without paved shoulders.

The modified clauses in the EPC document relate to contract price, contract period, maintenance, defect liability period, performance security and maintenance obligation of contractor. The definition of ‘Change in Law’ under Article 28 was also amended.

Highway_ProjectsMonitorWith the amendments in the EPC document, the contractor will get 1.5 percent of the contract price for the first year and 2 percent of the contract price for the second, third and fourth year. The contract price is a fixed lump sum amount for construction of the project highway. Under the earlier clause with respect to contract price, the contractor got 1.5 percent of the contract price for the first year and 2 percent for the second year.

With regard to the contract period, the maintenance period has been extended to a maximum of four years from the earlier two years. The contractor will be paid 1.5 percent of the contract price for the first year of maintenance and 2 percent for the second, third and fourth year of maintenance. The contract period is normally determined on a project specific basis depending on the volume of construction work involved. However, the agreement provides the flexibility of including the maintenance of the project highway in the scope of project.

Earlier, prior to the changes in the EPC document, the defects liability period was specified as one year in most contracts and as two years in the agreement to provide additional comfort to the government. The amended clause specifies the defects liability period as four years.

According to the amended clause relating to maintenance obligation of the contractor, the project highway will be maintained by the contractor for a period of four years commencing from the date of the provisional certificate. The maintenance obligation of the contractor before the amendments in the agreement was for a period of two years.

Following the modifications in the EPC agreement document, necessary amendments have been made in the Request for Qualification and Request for Proposal documents for EPC works.

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