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– President Ali warned contractors that failure to perform and breach of contract will be severely punished
There will be no wiggle room as President Dr Irfaan Ali has made it clear that there will be severe penalties for contractors who default on their contracts, such as blacklisting the companies.
President Ali, in a meeting with education ministry officials, contractors, engineers, regional executive officers (REOs) and project consultants on Saturday, said blacklisting due to breach of contract and non-performance of contracts could even lead to the bankruptcy of companies.
“I want to make it clear that these projects must be managed independently in the project documents and we will hold the REO and the engineers responsible for all these projects,” the President said firmly.
He continued: “From day one, if there is a breach of contract and the contractor has not performed their duties, I need to write letters and put them in the file. At the end of the contract period, or before, if there is a reason for termination, the file must be closed and a copy of the file must be sent to the National Procurement and Tender Management Committee so that they will know that these contractors have not performed their duties.”
He warned contractors that no excuses would be tolerated and stressed the importance of properly managing the site.
“The contractors will be penalized and your company will suffer losses because if you do not fulfill the contract, you will be blacklisted. Then you will not get new projects,” the head of state said, stressing the importance of the infrastructure sector.
While receiving updates on several ongoing projects, the President was informed that the Christ Church Secondary School is expected to be completed by November 15 this year.
The government has been battling insubordinate contractors for a long time, however, with a large number of national infrastructure works underway and the government planning to launch a new round of projects, delays cannot and will not be tolerated.
Therefore, Dr. Ali has previously stressed that efforts will be made to ensure accountability in contract enforcement, such as penalties for breach of contract.
“I have received reports from all national project managers; liquidated damages letters of about $3 billion have been issued to contractors. The projects are all over schedule,” President Ali told reporters at a previous press conference.
He stressed that all agencies and institutions have been instructed to ensure the payment of liquidated damages in contracts.
“Therefore, if the construction period is extended without a legitimate reason, liquidated damages must be charged,” he said firmly.
Contractual obligations
In addition, Attorney General and Minister of Legal Affairs Anil Nandlall also unveiled a series of measures aimed at ensuring timely execution of contracts and strengthening the government’s commitment to fulfilling its contractual obligations.
First, Nandlall stressed the government’s stance on breaches and delays in fulfilling contracts, saying: “All of this is part of the government’s zero tolerance for breaches and delays in fulfilling contractual obligations.”
One of the key measures announced by Nandlall was to reinstate and activate the role of departments within ministries to assess contract performance and activate relevant contract clauses.
These departments will be responsible for evaluating delays, breaches of contract and other contractual issues and imposing sanctions on defaulting contractors, including liquidated damages, forfeiture of security deposits and termination of contracts.
In response to criticism from some about the increase in bureaucratic layers and burden on taxpayers, Nandlall clarified that the measures would not impose additional costs on the government or taxpayers.
“Our intention is not to create another department or another layer of bureaucracy,” he said, adding that existing personnel from the attorney general’s office would join the new department, eliminating the need to hire new personnel.
Nandlall further stressed the legality and transparency of the government’s actions and said: “As per the law, under the Procurement Act, further sanctions are provided. For example, contractors are blacklisted once due process is followed.”
Minister Nandlall stressed that the state government is committed to meeting the promises made to the public regarding project delivery timelines, declaring: “Government will not tolerate negligence by contractors. Government will not tolerate breach of contract; government will not tolerate breach of contract obligations. These contracts are worth millions of dollars.
“So, it’s not a question of contractors not making money; there are cases where delays are justified and breach of contract is justified.”
Nandlall issued a direct warning to contractors: “Breaking of contracts cannot go unpunished.”
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