Comptroller and Auditor General (CAG) highlighted significant financial losses faced by the Delhi Metro Rail Corporation (DMRC) due to poor-quality work by a contractor. The report reveals a staggering shortfall of Rs 15.54 crore in DMRC’s recovery efforts, stemming from defective construction and the contractor’s reluctance to address the issues within the agreed defect liability period.
The trouble began when DMRC, after discovering significant flaws in the contractor’s work, was forced to conduct repairs at an additional cost. Initially, the repairs were estimated at Rs 11.85 crore, which included expenses for consultancy and construction services provided by another contractor. However, this was only part of the total expenditure incurred by DMRC. In addition to the repair costs, DMRC also faced substantial incidental expenses amounting to Rs 7.81 crore. This included the cost of shifting allottees to alternative accommodations, payments for lease charges, and brokerage fees. These unforeseen costs added to the burden on the corporation, which had already invested in the original project.
Despite incurring these significant expenses, DMRC was only able to recover Rs 4.12 crore from the contractor through a conciliation process. This was far less than the Rs 19.66 crore it had spent in total due to the contractor’s negligence. The report further criticizes DMRC’s decision to opt for a conciliation process rather than the arbitration method outlined in the contract, which could have potentially yielded better recovery. This financial setback highlights the importance of rigorous monitoring and quality control in large-scale infrastructure projects. Poor construction practices not only affect the completion timeline but also result in heavy financial losses, as in this case. Moreover, it emphasizes the need for contractors to honor their commitments and rectify any issues promptly within the defect liability period. For DMRC, the report serves as a reminder of the potential pitfalls in project management and the importance of holding contractors accountable for their work. As the metro network continues to expand, ensuring high-quality construction and effective dispute resolution mechanisms will be critical in safeguarding public funds.
