New Panchkula MC building: MC chief terminates construction firm’s contract

Over three years after granting the contract for construction of the municipal corporation (MC) building, the commissioner has terminated the enlisted firm’s contract over its “failure” to complete work as per agreement.

In December 2019, the construction of the office building in Sector 3, under a chief minister announcement dated August 1, 2017, was allotted to M/s Vasu Construction Co.

The work was initially required to be completed in 16 months, by April 2021. The deadline was further extended up to October 2022, but the building is nowhere near completion.

The firm’s termination comes in the backdrop of the corporation spending around ₹2.5 crore on rented accommodations and its maintenance every year.

Constituted in 2010, the MC is yet to have a dedicated building. In the current scenario, councillors are also at a loss of offices, while the civic body staff operate out of community centres in Sector 4 and 12, and a rented building in Sector 14, where the mayor and commissioner have set up their offices.

The issue of delay in construction had also been taken up by the opposition in this month’s House meeting, with Congress councillor Salim Dabokouri asking, “It has been three years and the new MC building is not ready? Till when will MC keep on spending crores on rented accommodations?”

The issue of slow progress was taken up several times, but the firm failed to provide a satisfactory response. The civic body has alleged that the firm unnecessarily delayed the completion of work; illegally removed 650 to 700 cubic feet of excavated earth from the site; did not comply with Green Rating for Integrated Habitat Assessment instructions and intentionally raised false excuses to shift the burden of delay on the corporation.

Additionally, the MC alleged, the firm avoided executing work as per the agreement, and removed key personnel, site plant, equipment and RML plant from the work site even though the work was not completed. The firm also expressed unwillingness to complete the work at HSR rates, the order mentions.

The agreement was eventually terminated by the commissioner, with the reasoning reading, “Fundamental breaches of the agreement and unwillingness to complete the work.”

The pending work is now expected to be carried out by another firm.

The defaulting firm, meanwhile, has been directed to pay liquidated damages of ₹2.94 lakh and penalty to the extent of 20% of the value of the work not completed as penalty. Also, the firm is debarred from participating in tenders for two years. The firm is also liable to pay for the loss suffered by the corporation on account of illegally removing 650-700 cubic feet earth from the site.

“The performance bank guarantee of ₹1.47 crore is ordered to be forfeited,” the order further mentions.