Board asks SCTL to impose cost of risk on ex-contractor

Thiruvananthapuram: With less than a year for the project period to end, the Smart City project is being plagued by a host of issues.
The board of Smart City Thiruvananthapuram Ltd (SCTL) has raised questions regarding the Multi-Level Car (MLC) parking project at Palayam after it was retendered and a new contract was awarded.
The project had to be retendered after the firm, which had won the bid and started execution, backed out owing to differences with SCTL regarding cost escalation.
In a recent meeting, the board asked why the previous contractor was given foreclosure without imposing risk and cost. It also sought a justification regarding reduction of the scope of the work.
The board has directed the CEO of SCTL to impose risk and cost on the previous contractor and to submit a detailed explanation justifying the award of work to the new contractor at the reduced scope.
All the officials who had been involved with the foreclosure of the project have been asked to submit an explanation. The initial proposal envisaged a basement floor structure dedicated to parking for about 270 two-wheelers with an approximate area of 2168 sq m, including ramps and an automated multilevel multi-grid parking system to accommodate 568 cars.
The proposal also contained allied facilities such as toilets, electrical installations, including DG back-up and fire fighting systems with sump tanks. When the project was retendered, SCTL revised the two-wheeler parking space to 220 and car parking to 300. EV charging stations were also included in the request for proposal document in the retender. In 2020, the project was awarded to a private firm at a cost of Rs 30.21 crore. The firm had completed two test piles and load tests and requested SCTL to provide price escalation. The SCTL, however, issued notice to the contractor citing that there was no provision for price escalation. An amount of Rs 95 lakh was paid to the firm.
The firm had approached the high court to appoint SCTL CEO as the adjudicator for price escalation. However, the court gave directives to SCTL to proceed with the bank guarantee revocation.
The board meeting had earlier decided to direct the CEO to revoke the bank guarantee submitted by the firm and to retender the work. The contractor had expressed unwillingness to continue the work without escalation of price.
The work was awarded to the new firm at a cost of Rs 29.75 crore and the letter of acceptance was issued in September.