FCC

Road builders could face liability for a decade

2024-02-14

The Ministry of Road Transport and Highways is contemplating the extension of the defect-liability period in engineering-procurement-construction (EPC) contracts to 10 years. This proposed measure aims to reduce the government's expenditure on road maintenance.

The intention behind this move is to encourage contractors to enhance the quality of construction, ultimately leading to a decrease in road accidents. The ministry is currently in discussions with stakeholders and will soon finalise the proposals.

An official, wishing to remain anonymous, revealed, "Expert consultations are underway to extend the defect-liability period under EPC contracts to 10 years, as the ministry is committed to enhancing the quality of construction."

In the EPC mode of road construction, the central government assumes responsibility for maintaining national highways once the defect-liability period concludes. During the defect-liability period, it is the contractor's duty to handle maintenance.

For the fiscal year 2024-25, the ministry has allocated Rs 26 billion for road maintenance. This amount remains consistent with the budgetary and revised estimates for 2023-24, with a slight increase compared to the Rs 25.73 billion expended in 2022-23.