In the light of the World Bank''s recommendations, the Executive Committee of National Economic Council (Ecnec) has approved revised bidding/ contract documents of the Pakistan Engineering Council (PEC) for provision of escalation in cost to offset the impact of rising prices of the construction material.
The new documents provides a clause in bidding/contract documents, allowing tenderers to submit either bank guarantee in the form of performance bond or insurance guarantee of an insurance company dully rated AA by JCR/ PACRA rating agency.
Sources said Ecnec granted approval for revised PEC documents for bidding/ contract in its meeting recently and notified the procurement procedure to all federal, provincial and district level implementing agencies for implementation.
Sources said the revised bid/ contract documents would be applicable for procurement of all engineering goods where escalation in the cost would be applicable. The government had taken all the stakeholders of the construction industry on board to make the new PEC bidding/ contract documents really workable. The World Bank had carried out an assessment of the implementation capacity of the construction industry and submitted its recommendations to the government of Pakistan to enhance capacity of its construction industry.
The main recommendations included long-term industry overhaul and immediate innovative approaches for mega infrastructure delivery, build-up of human resources and upgrade skills, enhance training capacity and reverse the brain drain.
These also included preparing of a national construction industry development policy for implementation by all stakeholders (contractors, consultants and clients) and provide it financial liquidity. The World Bank eliminated overlapping and redundant legislative requirements.
The All Pakistan Contractors'' Association (APCA) had expressed concerns on the escalation in the prices of building materials. It wanted a change in PEC bidding/ contract documents for relief to the construction industry.
APCA takes the new bidding/ contract documents as a great relief for major stakeholders of the construction industry. Recently, the prices of steel have particularly registered a steep increase. For abnormal price increases in the major building materials such as cement and steel, the contacts can incorporate an escalation clause based upon the notified prices of these building materials at the time of the contract.