CHENNAI: The State Public Works Department (PWD), after several decades, has revised the solvency limit fixed for contractors and has asked them to renew their registrations before June 30. A set of new guidelines was issued on March 31 for registration of contractors and renewal of registrations at Regional Chief Engineers' offices across Tamil Nadu.
According to a PWD source, more than 20,000 contractors are registered with the department under five categories. Those in Class-IA category can get contracts worth Rs 25 crore and above, Class-II from Rs 5 crore to Rs 10 crore, Class-III from Rs 2 crore to Rs 5 crore, Class-IV from Rs 50 lakh to Rs 2 crore, and Class-V can get work orders up to Rs 50 lakh.
From April 8, 1999, there was a flat solvency rate of Rs 30 lakh for all contractors. Under the new norms, the State government on January 13 fixed the solvency rate at 30 per cent for contractors based on their category and set a deadline for producing solvency certificate by March 31.
But after the contractors found it to be too high, the State reduced the solvency rate to 15 per cent and extended the time limit to June 30 for producing solvency certificate. According to a senior official, "For Class 1A contractors with monetary limit exceeding Rs 25 crore, the solvency is 10 per cent, while solvency for other classes will be 15 per cent."
"Class IA category contractors will get several work orders. So, 10 per cent solvency is vital. We instructed all stakeholders to submit solvency before June 30," PWD Building Contractors General welfare Association’s president B Shankar told he New Indian Express.