Uttarakhand to decrease centage charges

Posted May 23, 2008 | No comments yet

Shishir Prashant / New Delhi/ Dehradun, 23 May 2008

The Uttarakhand government today decided to decrease the centage charges and said the big projects would now be monitored by the experts of the Planning department. Centage charge is the fee given by the government to a construction agency, to keep its establishment functioning, after it is awarded a project.

Issuing the new government order (GO) in this regard, top officials said under the new rules the practice of awarding one-time 12.5 per cent centage fees to the construction companies has been stopped. Instead, the government would now give 8 per cent fees in case the project value is over Rs 5 crore.

In other cases, if the project value is in between Rs 1 crore and Rs 5 crore, the fee will be 9 per cent and will be 10 per cent if the project value is less than Rs 1 crore.

Significantly, the government has also decided to penalise the agency for the project delay by taking away a certain amount of the centage charge.

In the new GO, the government has also made the signing of a Memorandum of Understand (MoU)mandatory. “If you want to award a certain work to a company, the MoU is a must,” the official said.

The government also decided to constitute a panel of experts from the Planning department to monitor the construction work of the Rs 5 cr and above projects. “Now onwards, the monitoring of big projects has also been made compulsory by the Planning department,” the official added.

The new GO came in the wake of complaints in the recent past that the working of construction companies in the state was not being monitored properly which was leading to undue delays and bad quality works especially in the construction of roads, highways and bridges.

The government is spending Rs 800 crore this year on various roads, bridges and highways in the state under the rural development programme.

News Source: http://www.business-standard.com