Chennai Metro Tweaks Contracts to Ensure Timely Execution of Phase – II

After terminating contracts with four companies involved in the construction of phase-1 and phase-1 extension lines of metro rail, Chennai Metro Rail Limited (CMRL) is tweaking its contracts with firms to ensure faster construction of the 118.9 km phase-2 lines. The changes made in the contracts will help avoid additional cost of both the contractors and CMRL.

CMRL is of the view that the new clauses would allow it to offload work from companies that are likely to miss project deadlines and, also keep a tab on contractors to avoid diverting metro rail funds for other projects they may be involved in.

Revision of clauses in construction contracts have come at the time when CMRL has started floating tenders for building tunnels for a portion of the phase-2 lines. Amending the guidelines is crucial as it will be awarding contracts to several companies. Among the major tweaks:

  • CMRL plans to split the lines into portions and float tenders, unlike in phase-1 where big stretches were given to a single firm for construction.

So far, tenders to build twin-tunnels between Kellys and Taramani Road covering 12km and a 9km line from Venugopal Nagar to Kellys have been floated. Awarding work on small stretches in phase-2 to firms also means that construction would not be affected on the entire corridor if work on a portion gets delayed.

  • The option to offload work from one contractor, who may have a poor pace of construction or have other deficiencies, to another company involved in the same project at an already fixed rate, preventing loss of time on calling for New Tenders to find a contractor.

The above option was introduced in phase-1 extension. “The clause made us work comfortably without the fear of time overrun. With a notice to the contractor, we can offload a particular work,” an official said. “We mostly offloaded those crucial areas of work that need to be finished on priority and hand it over to other contractors for further work such as installation of signals, communication systems and electrical work.”

  • Opening a common bank account to monitor use of funds by contractors and releasing of mobilisation funds in instalments to ensure contractors complete work on time.

“Earlier we released 10% of the funds at one go. We realised 10% is not required at the same time, so we decided to transfer it in three instalments. After the first instalment, they have to show us the progress before we release the rest of the money. If they don’t perform, we have a clause to encash their bank guarantee. The contractor cannot use the surplus money without completing the work,” the official said. “We also conduct checks every four months to ensure the company is not diverting funds.”

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