{"id":62256,"date":"2020-05-07T16:27:22","date_gmt":"2020-05-07T10:57:22","guid":{"rendered":"https:\/\/dwarkaparichay.com\/blog\/?p=62256"},"modified":"2020-05-07T22:30:28","modified_gmt":"2020-05-07T17:00:28","slug":"covid-19-be-declared-as-a-force-majeure-for-infra-projects-and-for-automatic-expension-for-running-projects","status":"publish","type":"post","link":"https:\/\/dwarkaparichay.com\/blog\/covid-19-be-declared-as-a-force-majeure-for-infra-projects-and-for-automatic-expension-for-running-projects\/","title":{"rendered":"”COVID-19 BE DECLARED AS A FORCE MAJEURE” for Infra projects and for automatic expension for running projects"},"content":{"rendered":"\n

Dwarka Parichay<\/a> Newsdesk<\/p>\n\n\n\n

The\u00a0Consulting\u00a0Engineers\u00a0Association of India (CEAI), the apex body of\u00a0engineering\u00a0professionals in the country,\u00a0in a letter to\u00a0the\u00a0Union Minister of Finance Ms Nirmala Sithraman has urged the government to declare COVID -19 as a Force Majeure event for all infrastructure\u00a0 consultancy contracts under implementation as both Parties, neither the Client nor the\u00a0 consulting companies are able to meet contractual performance in\u00a0 ongoing projects.<\/p>\n\n\n\n

Force Majeure’ clause is a contractual provision that addresses\u00a0circumstances in which contractual performance becomes im[possible o impractical\u00a0due to events that could not be foreseen\u00a0, and are not within party’s\u00a0 control. Consulting engineers provide consultancy to government in major infrastructure projects including roads, airports, bridges, railways and ports.<\/p>\n\n\n\n

\u201cThe total lock-down, though was inevitable, has major implications on companies, particularly the Consulting companies, which have a small capital base.\u00a0 In present lockdown conditions, it will be difficult for these consulting companies to meet contractual performance for Consultancy Contracts under implementation or under service including \u00a0preparation of Feasibility Report and Detailed Project Report (DPR), Detailed Engineering, Project Management by an \u00a0Authority Engineer\u201d said Said Mr. K.K.Kapila, Past President, CEAI and Chairman,\u00a0Infrastructure Committee.<\/p>\n\n\n\n

\u201cThe running contracts expiring during the lock-down period should be given an automatic extension of time and there should be a waiver for Submission or\u00a0 extension of Bank Guarantees as provided for in the Contracts, during this lock down\u00a0period.\u00a0 Provision for payments need to be made for deployment during extended period along with the overheads.\u201d Said Mr. Kapila<\/p>\n\n\n\n

\u201cThe government should release 90%\u00a0payments\u00a0of the already submitted Invoice amount by\u00a0the Consulting firms, as per valid payment clause in the Contract, prior to scrutiny of Invoice by the department staff. The balance payment may be released after the due process. This will enable Consultants to pay to their staff and to the support organizations that work for them as well as to large number of informal persons whose services are availed from time to time.\u201d Said Mr. K.K.Kapila,<\/p>\n\n\n\n

\u201cFor redressal of immediate financial crisis, the Income Tax refunds for FY 2016-17 and 2017-18 may be released on top priority across the spectrum, particularly to the Engineering Consultancy fraternity, who operate on a small capital base.\u00a0The clearances of these outstanding payments would be of significant bearing to the Engineering Consultancy Industry and would instill hope and confidence to carry on post COVID 19 lock down towards business continuity.\u00a0\u201c said Mr Kapila.<\/p>\n\n\n\n

\u201cAs per present process in vogue, GST is required to be paid by consulting firms\u00a0within 30 days of raising the invoice while the payments from the Clients, mostly government,\u00a0are received anywhere between 4-6 months or even beyond (as late as a year). This puts an enormous pressure on our cash flows. As such, an urgent correction is required in GST dispensation, which could be explored by the GST Council to give reprieve to the Consulting Fraternity\/Service Sector. \u201c said Mr Kapila.<\/p>\n\n\n\n

\u201cCEAI suggests that the GST be \u00a0paid by the Service Receiver (Client) directly to the Authorities, on similar lines as the TDS. Alternatively, the Service Provider could be allowed to deposit the GST within 30 days of receipt of payments from the Client – which was the practice in vogue, prior to 2012, when the present dispensation was introduced. If, however, for any reason the above two suggestions do not find favor with the Government of India, then the Service Provider may be given a timeline of 120-180 days from the raising of invoice to deposit the GST, in line with receipt of payments from the Client. The Client may be mandated to make the payment along with the GST to the Service Provider, with a copy to the concerned GST office.\u201d Mr Kapila added.<\/p>\n\n\n\n

\u201cFor Government Projects\/Contracts, digital signature on documents to be made valid for all proposals, contracts, etc., and physical copies or other documents shouldn\u2019t be demanded for.\u00a0 To propagate and popularize digital signatures concept, an online payment process with access should be provided for the Government officials for dynamic and smooth processing of projects and contracts.\u00a0 This will positively impact and enhance ability of the companies to work on government projects and contracts.\u201d He added.<\/p>\n\n\n\n

CEAI also urged the\u00a0Government to provide clear directives to the Insurance companies\u00a0\u00a0to cover\u00a0\u2018\u2019home office inputs\u2019\u2019\u00a0under the definition of workplace to ensure availability of Professional Indemnity insurance coverage to the staff of Consulting Organization\u2019s who operate from home.<\/p>\n\n\n\n

CEAI also urged the Government to consider re-introducing the\u00a0concept of Omnibus BGs as against providing\u00a0individual BG against professional indemnity, against each Contract. CEAI suggested that Omnibus BGs should be allowed\u00a0to be provided Client-wise for specified values, depending on the quantum of work each Consultant has with that particular Client.<\/p>\n\n\n\n

Source: V K Arora <\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Dwarka Parichay Newsdesk The\u00a0Consulting\u00a0Engineers\u00a0Association of India (CEAI), the apex body of\u00a0engineering\u00a0professionals in the country,\u00a0in a letter to\u00a0the\u00a0Union Minister of Finance Ms Nirmala Sithraman has urged the government to declare COVID -19 as a Force Majeure event for all infrastructure\u00a0 consultancy contracts under implementation as both Parties, neither the Client nor the\u00a0 consulting companies are able to meet contractual performance in\u00a0 ongoing projects. Force Majeure’ clause is a contractual provision that addresses\u00a0circumstances in which contractual performance becomes im<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1889,1888,1875,1],"tags":[],"class_list":["post-62256","post","type-post","status-publish","format-standard","hentry","category-lockdown","category-corona-update","category-events","category-update"],"_links":{"self":[{"href":"https:\/\/dwarkaparichay.com\/blog\/wp-json\/wp\/v2\/posts\/62256","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/dwarkaparichay.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/dwarkaparichay.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/dwarkaparichay.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/dwarkaparichay.com\/blog\/wp-json\/wp\/v2\/comments?post=62256"}],"version-history":[{"count":1,"href":"https:\/\/dwarkaparichay.com\/blog\/wp-json\/wp\/v2\/posts\/62256\/revisions"}],"predecessor-version":[{"id":62257,"href":"https:\/\/dwarkaparichay.com\/blog\/wp-json\/wp\/v2\/posts\/62256\/revisions\/62257"}],"wp:attachment":[{"href":"https:\/\/dwarkaparichay.com\/blog\/wp-json\/wp\/v2\/media?parent=62256"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/dwarkaparichay.com\/blog\/wp-json\/wp\/v2\/categories?post=62256"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/dwarkaparichay.com\/blog\/wp-json\/wp\/v2\/tags?post=62256"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}