There was a time when a contractor would give an arm and a leg to win a big government tender. Not anymore. According to ministry mandarins, many contractors who bagged major contracts are doing their utmost to get blacklisted to avoid executing the tenders, and escape severe penalties for failing to meet the project execution milestones. According to a highly placed PSU source, many of the contractors had bagged the contracts in 2020, when steel prices were in the range of Rs 37,000 per tonne. The contractors, as is the norm, would have factored in a 15-20% hike in steel prices. In reality steel prices doubled to Rs 72,500 in March 2022 before falling to around Rs 60,000 per tonne in April 2022 “There is no way the contractors can execute projects at these prices; it’s totally unviable. But given the stringent penalties for failing to meet tender conditions, the only hope for contractors to escape the penalties is to get blacklisted on some count or the other,’’ said a source. If a large number of contractors get blacklisted it will be a big setback for all public sector undertakings. With the government chalking up a CAPEX of Rs 7.5 lakh crore in 2022-23, it will be a lose-lose proposition for everybody. So, should public sector undertakings go in for re-tendering the contracts?
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