Palarivattom flyover graft: Rs 6.24 crore written off to help contractor

‘Vigilance probe team has seized necessary documents pertaining to the financial fraud’

Published: 17th October 2019 07:21 AM  |   Last Updated: 17th October 2019 07:21 AM   |  A+A-

Express News Service

KOCHI: Another major financial fraud has come to light in the construction of Palarivattom flyover with the probe revealing that Roads and Bridges Development Corporation of Kerala Ltd (RBDCK) and Public Works Department (PWD) have not only illegally released mobilisation advance of `8.25 crore to RDS Project but also written off `6.24 crore which the contractor should have deposited with the state government as performance security deposit.

As per the details of the documents accessed by TNIE from PWD and RBDCK, the RDS quoted `47,68,38,214 and offered a rebate of 13.43 per cent thereby reducing the quoted amount to `41,28,03,312. 
This amount was less than the estimated amount and RBDCK should have charged `6,42,55,951 as unbalanced bid amount along with 10 per cent of the contract price as performance security deposit.
The rule stipulates that the contractor should deposit the said performance security with the state government.

“Analysis of the documents reveal that the contractor has not deposited such an amount as unbalanced bid amount. The RBDCK officials took a decision in favour of RDS Project and exempted the company from paying the amount,” said a senior PWD officer. 
The Clause 30.3 of bidding document mandates that “the successful bidder shall deliver to the employer a performance security 10 per cent of the contract price plus additional security for unbalanced bid in accordance with the conditions of the contract.”
This clause was overlooked when RBDCK executed the agreement with RDS Project. 

Also Clause 28.4(c) of Instruction To Bidders (ITB) says that “after evaluation of the price analysis, the employer may require that the amount of the performance security set forth in Clause 30.3 of ITB be increased at the expense of successful bidder to a level sufficient to protect the employer against financial loss in the event of default of the successful bidder under the contract.”

As per the above clause, RBDCK should have charged an increased amount which is more than the unbalanced amount and the Clause 28.4 empowers RBDCK to do so. 
However, RBDCK did not comply with this provision. 
“BDCK violated the rules to help the contractor enjoy financial advantage,” the official said. adding that the Vigilance probe team has seized the necessary documents pertaining to this financial fraud.

PWD Manual Clause 2009.7 on Performance Security Deposit
If the bid of the successful bidder is unbalanced in any item in the case of item rate contract or in total in the case of percentage rate contract, relation to the estimate, the difference in cost should be deposited as performance security deposit for unbalanced price in addition to he normal performance security deposit


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