PHPA-I management finds L&T claims not maintainable

Phurpa Lhamo | Wangdue

The Punatsangchhu Hydroelectric Project Authority’s dispute resolution committee established that the claim of Nu 3.9 billion (B) made by the Larson & Toubro (L&T) is not maintainable.

The management, about a week ago, also received an approval from the Authority’s chairman, Economic Affairs Minister Loknath Sharma, to inform the contractors of the committee’s decision. 

The Authority’s director finance, joint managing director, and director technical are members of the dispute resolution committee. 

According to the Authority’s Managing Director NC Bansal, the dispute resolution process had three levels.

First, the engineer in-charge studies the claims and makes a decision. If, however, the contractors do not agree to the findings, they could approach the Authority’s managing director. If the contractors are dissatisfied with the managing directors, they can then go to for arbitration. 

“In case of L&T, the managing director level has been crossed,” said NC Bansal.

L&T had made 13 claims.

According to NC Bansal, the committee found that the claims were not at par with the provisions of the contract. 

Kuensel learned that L&T claims were for idling of the resources such as manpower and equipment. 

“The resources have been laying idle since 2013. Whatever cost is incurred, that can be examined and probably be compensated,” L&T official said. 

Earlier, a claim of Nu 3.29B by the Hindustan Construction Company (HCC) was also found non-maintainable. The claims received on July last year were conveyed to be not maintainable in January this year.

The decision was made by the engineer in-charge. HCC has not re-appealed to the management.

HCC was not available for comment.

“Decision on HCC was at the engineer in-charge level. But first, they had to seek internal approval so the management was involved,” NC Bansal said. 

He added that claim disputes were common. “There is always dispute; they might think they are entitled to more payment from what the engineer in-charge feels. It happens with every contract.”

The report filed by the dispute committee meeting was shared to the nominees of the two countries.

“It was also sent to other GoI members for their information, not for any necessary action. The necessary action has to be taken by managing director,” NC Bansal said

The HCC and L&T have been with the project since 2009.

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