Issue

Opinion of the committee

description

The Committee deliberated the issue in depth and noted the following points:
1. The issue of non-refund of half the retention money has arisen due to a defect in one of the two compartments of a CWR during the Defects Liability
Period.
2. As per clause 14.10 of GCC, the second half of retention money can be claimed in the "Final Statement Design Build".
3. As per clause 12.1 (a) of GCC, final payment of Design Build period can be made after completion of any work which is outstanding on the date of
commissioning and after remedying defects notified by Employer.
4. The defect in CWR has arisen during Defects Liability Period and not during Design Build Period. The Design Build Period had been completed on
Release of 2nd 11.12.2018.
5. Clause 12.1 (a) also states that Final Payment of Design Build period is to be made "not later than one year" after date of commissioning. The one year
half of period has ended on 10.12.2019.
retention
money of 6. Water supply has been continuously maintained without interruption inspite of damage to one of the two compartments of the CWR.
Nagaur TM 02 7. As per clause 10.14 (WR-122 of Volume -1 ) of bid document, The retention period shall be of 12 months, from the date of completion of Trial Operation is
certified. CE Nagaur also agreed that contract agreement does not indicate any specific provision for extension of Retention Period due to pending
Project rectification of any component.
8. The committee is of the view that if in case any defect cannot rectified during the retention period then such a case may be governed by Clause 12.5 of
GCC. As per clause 12.5 of GCC, in case of any damage or defect cannot be rectified expeditiously, contractor is required to increase the amount of
Performance Security by the full replacement (repair) cost. There is no mention in the contract agreement for retaining the retention money in such cases.
9. On careful perusal of the various conditions of contract agreement, it is clear that refund of retention money is linked with Design Build period and not
with Defects Liability period and the second half of retention money is to be returned not later than one year from the date of commissioning.
10. After detailed discussions, the Committee was of the view that second half of the retention money may be returned subject to submission of additional
Performance Security equal to the cost of repair/replacement of CWR. The amount of additional Performance Security shall be determined by CE Nagaur.