Sub-contractors or not, onus is on Gammon

HYDERABAD: The World Bank, which funds several infrastructure projects in India, had talked about big contractors sub-contracting the entire work, or a major portion of it, to unqualified sub-contractors with the silent support of the department, nearly five years ago. The observation, made by the bank in its country procurement report, assumes significance in the backdrop of the controversy surrounding Gammon India, which is the prime contractor making the flyover that collapsed on Sunday.

Both Gammon India and the Andhra Pradesh government claim that the job has not been outsourced, although reports indicate that the company had given the job to local contractors close to the political establishment. The last word on this may perhaps come from the inquiry committee, which is probing the reason for the mishap.

But industry trackers are clear that the onus of any project rests with the contractor, even if they sub-contract the job to local firms. “The grade of sub contractors varies from a specialised to level one to six, depending on the value and the size of the project,” said Anil Kumar Varma, consultant, Jones Lang LaSalle Meghraj.

Representatives of the construction industry hold that the companies need to exercise due diligence while outsourcing the job to sub-contractors. “The technology for building flyovers is time-tested. But it is imperative to employ sub-contractors who can do good quality work,” said GVK chief financial officer A Issac George.

There are others who reckon that the norms for sub-contractors are far too stringent. “If we go strictly by the rule book, it would be next to impossible to have sub-contractors,” said Ramky Group chairman Ayodhya Rami Reddy. According to the World Bank report, there is a reasonably good framework of rules, procedures and documents.

The basic framework of rules and procedures require open tenders, open to all qualified firms without discrimination, use of non-discriminatory tender documents, public bid opening and selection of the most advantageous tender, taking all factors (preferably pre-disclosed) into consideration.