Engineering, Procurement and Construction of Highways Model Agreement

Abstract

The Central and State Governments have been constructing roads primarily through the conventional ‘item rate’ contracts which came into being several decades ago. These contracts served their purpose when the size of contracts was small and the capacity of private sector was limited. The environment has undergone a sea change over time, making these contracts outdated. In particular, these contracts tend to suffer from time and cost overruns which seem to have become synonymous with public sector construction projects. These contracts can also encourage malfeasance and disputes because they provide a vast discretion to alter the quantities of work during the course of construction.