Escalation

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PIJUSH KUMAR CHAKRABORTY (Querist)
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22 January 2022 We are executing construction work under PSU. As per contract escalation to be paid vide CPWD manual clause 10CC. Original time of completion was March'2020 due to delays occurred on the part of the PSU for one year and further due to effect of COVID19 work has been extended up to June'2021. March'2021 extra work was incorporated and therein the PSU has cited the extended date of completion as 30.06.2021. Now during calculation of escalation citing the clause 10CC PSU wanted to freeze the indices as prevailing June'2020 for the following quarters like Sept'2020, Dec'2020, March'2021 and on. Till june 2021 75% of the original contract value has been executed. Hence balance 25% of original contract plus extra work yet to executed as on June'2020. Now quaries are :- Whether the indices of RBI and labour wages prevailing during the respective quarters of work done to be considered or it is to be freeze as suggested the PSU i.e. June'2020 for the further quarters.

Now quaries are :-
Whether the indices of RBI and labour wages prevailing during the respective quarters of work done to be considered or it is to be freeze as suggested the PSU i.e. June'2020 for the further quarters.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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22 January 2022 The indices of RBI and labour wages prevailing during the respective quarters of work done to be considered.
As per clause 10CC

The increase should not be attributable to delay in the execution of the contract within the control of the contractor.

As corana delay can't be within the control of the contractor escalation has to be paid

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