Panel Favours Abolition of Annuity Package System

The Estimates Committee of the State Legislature on Public Works Department (PWD)

Published: 30th November 2013 01:08 PM  |   Last Updated: 30th November 2013 01:08 PM   |  A+A-

The Estimates Committee of the State Legislature on Public Works Department (PWD) recommended that the government abolish the annuity package system in awarding works following complaints of substandard.

MLA and committee chairman Mallikayya Guttedar told reporters here on Friday that though this is a good concept, there are so many drawbacks. Besides, it causes additional burden on the state’s exchequer. The system of awarding bonus to contractors under the scheme should be stopped forthwith. The cost of works is seven to eight times more than the estimated amount under the annuity scheme.

Citing an example, he said a 43 km road work between Laxmeshwar and Mangasuli was taken up under the annuity scheme in 2009  at an estimated cost of `105 crore. The contractor, however, revised the estimate to `265 crore and also received `72 crore from the government. Following complaints of substandard work, the committee members inspected the road and found that the quality of work was below normal. But the contractor was getting `16 crore from the government apart from a bonus of `24 crore.  Interestingly, not many vehicles ply on the stretch and the department need not have approved the work at all, he said, adding: “The committee has asked the government to hold an inquiry and punish the errant officials. Till then, no bills of the contractor should be cleared.”


The committee also recommended simplifying tender norms so that more contractors can participate. At present, only a few contractors bid for tenders whose works are substandard, he said.

The committee also recommended criminal proceedings against contractors who stop work midway, besides blacklisting them.

Other Recommendations

  Give `1,000 crore for the repair of all district roads

  Hike the annual maintenance cost of district roads from `25,000 to `1 lakh

  Recruit gangmen to ensure immediate repair of roads and post each one for every 10 km

  Take up work on shelved/cancelled bridges in 2007-08

  Release an additional `300 crore to the Karnataka Road Development Corporation Limited to complete all works in time

  Merge KRDCL and K-Ship


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