The Hindu : Front Page : Kerala, Malaysian firm sign pact

Online edition of India's National Newspaper
Thursday, Dec 13, 2007
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Kerala, Malaysian firm sign pact

Special Correspondent

Work on World Bank-assisted Kerala State Transport Project to be resumed

The agreement allows a cost escalation of 72.5 per cent for the remaining work

Government agrees to release five bills due to the company totalling Rs.11 crore for works done

THIRUVANANTHAPURAM: The Kerala Government and the Malaysian Company Pati BEL on Wednesday signed an agreement for resumption of work on the World Bank-assisted Kerala State Transport Project (KSTP).

Secretary (Public Works) Tom Jose and country-director of Pati BEL Yam Keong Chee signed the agreement, which allowed a cost escalation of 72.5 per cent for the remaining work under the project.

Speaking to the presspersons after signing of the agreement here, Minister for Public Works Mons Joseph said works costing Rs.109 crore had been completed out of the original project cost of Rs.215 crore. The contract for the remaining work was being revised from Rs.106 crore to Rs.182 crore.

Payment in rupee

The Minister said the work would begin in a month’s time and would be completed in 24 months.

The Government had agreed to release five bills due to the company totalling Rs.11 crore for works done earlier.

While these bills would be paid in dollars, future bills would be paid in rupees within a short time on receipt of interim payment certificate from supervising engineers.

Cases filed by the two sides following termination of the contract earlier would be withdrawn. However, this would not include the Vigilance probe ordered by the Government.

Mr. Joseph said the agreement was clinched after protracted discussions.

At one stage, Chief Minister V.S. Achuthanandan had taken up the issue with the Malaysian Public Works Minister.

The Cabinet gave the clearance for the renewal of the contract on Tuesday.

The project covered about 127 km of road, of which about 54 per cent had been completed earlier.

Arbitration claims

The Minister said the arbitration claims had been capped at Rs.35 crore. This did not mean that the Government would have to incur an additional expenditure of that magnitude.

Arbitration award was to be determined independently by the arbitrator on the basis of the grounds for the claims.

Mr. Chee said that a fair agreement could be reached after prolonged discussions.

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