MMRDA to offer incentives to end Metro work early

Aiming to prevent crucial Metro projects from getting delayed, the Mumbai Metropolitan Region Development Authority (MMRDA) has decided to introduce a clause in their contracts with various civil contractors. As per the clause, a contractor finishing the project before the deadline will be given an incentive.

The new clause will be introduced and implemented in all the proposed Metro corridors in Mumbai Metropolitan Region (MMR), expect the Dahisar-DN Nagar Metro-2A and Dahisar (east)-Andheri (east) Metro-7 corridors as works for these two corridors were issued in May this year.

“The reason we came up with such a clause is to motivate the contractors to finish their works for the Metro projects before the scheduled time. However, we are yet to work on the calculations of the amount that would be given as incentive. We would introduce the incentive clause in the bid agreements for all the proposed Metro corridors once we are done with the calculations,” said Pravin Darade, additional metropolitan commissioner, MMRDA.

But the trend of giving incentives to the contractors for finishing work before deadlines is not new. The same had been experimented with in the past by the Brihanmumbai Municipal Corporation and Maharashtra State Road Development Corporation for the Mumbai-Pune Expressway.

The MMRDA has proposed to construct a network of 172-km-long Metro corridors in the MMR. While the contractors for Metro-2A and Metro-7 have already been appointed, MMRDA is soon going to invite bids for DN Nagar-Mankhurd Metro-2B and Wadala-Ghatkopar-Thane-Kasarvadavali Metro-4. The deadline for these two projects is 2022.

The new clause would also have a negative impact. While the MMRDA will be giving incentives for completion of work well before time, a penalty would be levied on those flouting the deadline. In case of Metro-2A and Metro-7, 10 per cent of the total project cost would be the maximum penalty for delays. It is known as liquidity damages. “However, the contractor will not be penalised in case the delay happens due to the implementing agency,” said an MMRDA official.

Meanwhile, the MMRDA is raising funds from international institutions like the World Bank, Asian Development Bank, Japanese International Cooperation Agency for the execution of major infrastructure projects.