Routine Contractual Letters on Maintenance

To

The Concessionaire,

Subject: Joint site inspection (intimation) of the project highway

Dear Sir,

As per the provisions of Section 1, Schedule Q, “the objective of consulting services during the operation and maintenance period is to act independently and on behalf of the authority or client to review all activities associated with O&M and ensure compliance with the requirements of the concession agreement in order for the current condition to have a sound project.”.

As per CA Article 19, Clause 19.1, “the independent consultant or engineer shall inspect the project highway at least once every month, and an O&M inspection setting forth an overview of status, quality, and safety requirements is required to review and inspect the project highway at least once a month during the O&M period. After each inspection, the engineer is responsible for creating an inspection report. The engineer shall inspect the project highway and prepare a report of the inspection. The report, known as the “O&M inspection report,”  should provide a detailed description of any defects or deficiencies found, specifically referencing the maintenance requirements, maintenance manual, maintenance program, and safety requirements.

Conclusion:

According to the above provisions, we, the independent engineer, intend to carry out inspections of the project highway during the period from January 7, 2024, to January 9, 2024. It is desirable that, for the necessary course of action, you join our field staff in the joint inspection of the project corridor. To achieve this, please delegate your team.

Kindly contact our highway maintenance engineer. Please get in touch with Shri xxxxxxx to finalize the inspection program schedule for the project facilities.

Thank you while ensuring our best services.

[Yours Sincerely,]

[Insert the name of the authorized person].

The Concessionaire,

Subject: Inspection Report and Defect Notice-Reg

Reference:

1. Intimation for joint site inspection refers to letter 1 above.
2. Site inspections were dated: xx, xx, xx, and xx.

Dear sir,

The Concession Agreement contains provisions regarding Inspection Reports and Defect Notices.

The objectives of the consultancy service during the Operation & Maintenance period are to act independently and on behalf of the Highway Authority to review all activities associated with Operation & Maintenance to ensure compliance with the requirements of the concession agreement in order to have a sound project. This is in accordance with the Terms of Reference for Independent Consultant Services listed in Schedule ‘O’ of the Concession Agreement, as well as Section 2’s provisions.

Furthermore, during the operation and maintenance period, the independent consultant must review and inspect the project highway at least once a month in accordance with Section 3.3, Schedule-O, Page O-39, SCOPE OF SERVICES Clause 3.3.7.

It will also issue a copy of the inspection report to the Highway Authority and the concessionaire/contractor [optional: within 7 days of such an inspection]. It will also prepare a report on these inspections, known as the Operation & Maintenance Report, which will provide a detailed account of any defects or deficiencies found, specifically referencing the maintenance requirements, maintenance manual, maintenance program, and safety regulations.

An image of the inspection report and defect notice was sent to the concessionaire.

Routine Contractual Letters for Maintenance: Inspection Report and Defect Notice

1. Pursuant to the above-stated provisions, we have carried out various inspections of Project Highway during the month of January 20xx. We have compiled the inspection findings into a report. We have attached the inspection report for your immediate review and consideration.
2. Therefore, you are hereby NOTIFIED in accordance with the provisions of Clause 19.2 of the Concession Agreement. We direct you to address the defects, deficiencies, and discrepancies noted at the site and recorded in the inspection report.
3. For convenience and record purposes, submit your defect-wise compliance in the same format to this office as per Concession Agreement requirements within the specified time frame.
4. Format of the inspection report

Thanking you while ensuring you our best services.

[Yours Sincerely,]

[Insert the name of the authorized person]

The Concessionaire,

Subject: Inspection Report and Defect Notice-Reg

Reference:

1. Letter No. 02, Dated XX.XX.2024 (19.2 Notice) is cited.

Dear sir,

We would like to direct your attention to the letter we mentioned earlier. We issued an inspection report for the month of January 2024, as per Clause 19.2 of the Concession Agreement, and notified you of the inspection findings. The January 2024 inspection of the project corridor revealed approximately X defects, deficiencies, and stresses.

We will conduct a review inspection of the project corridor from February 2, 2024, to February 10, 2024, to assess the status of defect rectification for the notified distresses.

Please assign your representatives to assist our team in assessing the status of completed work in March 2024, enabling us to eliminate any eligible issues and update our records.

We further advise you to make this a monthly routine practice to avoid any ambiguity in the record-keeping of your maintenance work or defect rectification.

Thank you while ensuring our best services.

To

The Concessionaire,

Subject: Notice to the contractor for an Incomplete Defect Rectification under Clause 18.12 of the Concession Agreement-Reg

Reference: An inspection report and defect notice issued to the concessionaire 30 days prior to the current date.

We forwarded the inspection report for January 2024 to you through our letter of reference. We discovered new defects or deficiencies for the month of January 2024, requiring you to comply with O&M requirements within 30 days, as per Clause 19.2 of the Concession Agreement. But you have failed to rectify the deficiencies.

A. Clause 18.12 of the Concession Agreement provides as follows:

• “If the concessionaire fails to maintain and/or repair the project highway, or any portion thereof, in accordance with the specifications and standards, as well as the maintenance program or the maintenance manual, the concessionaire must initiate remedial work within 30 days of receiving the notice.
• The Authority, the Independent Consultant, or the O&M Inspection Report, depending on the case, can fix and maintain the project highway at the concessionaire’s risk and expense, and then get those costs back from the concessionaire. This does not affect their rights under this agreement, including the right to end it.
• The highway authority will recover as damages from the concessionaire an amount equivalent to 25% (twenty-five percent) of the above-mentioned cost of repair and maintenance, in addition to the authority’s recovery of said cost.

B. Clause 18.13 of the Concession Agreement provides as follows:

• If the Highway Authority fails to implement the necessary repair and maintenance after the 30-day period outlined in Clause 18.12,
• It shall recover damages from the concessionaire for default in operating and maintaining the project highway in conformity with this agreement. 
• Such damages will be payable after the aforementioned 30-day period, and until the default is cured.
• Each default day will result in damages equal to the greater of the following:
• It is specifically (a) Rs 10,000 and (b) 0.1% (zero point one percent) of the independent consultant’s estimated cost of making such repairs.
• Recovery of such damages shall be without prejudice to the rights of highway authorities under this agreement, including termination thereof.

Clause 18.14 of the Concession Agreement outlines the following provisions:

• Should the concessionaire initiate any repairs to address any flaws or inadequacies in the project highway, it shall complete such works promptly and in accordance with good industry practice.
• If the execution of such works results in a delay exceeding 30 days compared to the time required according to good industry practice, according to Clause 18.13, the highway authority shall recover the concessionaire’s damages as if a default occurred.”

1. Notifying the concessionaire frequently to ensure compliance with the defect notice, as per the independent engineer’s obligations

• Since our appointment as the Independent Engineer and mobilization w.e.f. XX-XX-2025, we have conducted regular inspections of the project corridor for the operation and maintenance phases. We regularly issue O&M reports to you, ensuring compliance with the O&M requirements within 30 days, as per Clause 19.2 of the concession agreement. However, we have not yet remedied all the defects and deficiencies we notified you about in our letter.
• Although we have been requesting you in each and every monthly O&M inspection report to ensure compliance under the requirement of Clause 19.2, you are not fully attending to those deficiencies, observations, or O&M requirements within the specified time.
• Thus, you have failed to carry out your obligations regarding the O&M requirements provided in the concession agreement. As a result, you have become liable for further action for non-compliance with O&M requirements.

1. A letter to the contractor concerning an incomplete defect Rectification offers a chance to finish rectifying the remaining defects. Rectification afforded an opportunity to attend to the balance defect rectification.

In accordance with the aforementioned provisions, we are serving you notice under Clause 18.12 of the Concession Agreement. Also, it allows for an opportunity to attend to the deficiencies, defects, and requirements as already notified to you via our letter under reference within 30 days from the date of this notification.

1. Warning Do you remember levying damages for non-compliance with contractual provisions?

• Furthermore, you understand that if you fail to fulfill your contractual obligations within the specified time frame, the Highway Authority will take further action or recover the cost of repair and maintenance, along with a sum equal to 25% (twenty-five percent) of such costs as damages under Clause 18.12 of the Concession Agreement, or recover damages for each day of default, whichever is higher:
• It is specifically (a) Rs 10,000 and (b) 0.1% (zero point one percent) of the independent consultant’s estimated cost of making such repairs in accordance with the provisions of Clauses 18.13 or 18.14 of the concession agreement.

Thank you while ensuring our best services.

Thanking you while ensuring you our best services.

[Yours Sincerely,]

[Insert the name of the authorized person].

The Concessionaire,

Subject: Request for Highway Authority’s decision or option for further action under Clause 18.12 or 18.13 of the Concession Agreement-Reg.

Dear Sir,

Reference:

1. Letter No. XX Dated XX.XX.2024 (19.2 Notice)
2. The letter with the number XX is dated XX.XX.2024 (18.12 Notice).

This is in continuation to the Letter no:4, above

The concession agreement’s clause 18.14 states the following:

• If the concessionaire begins any work to cure any defects or deficiencies in the project highway, it shall complete such works expeditiously in accordance with good industry practice.
• The Authority shall recover the damages from the concessionaire as if a default had occurred under Clause 18.13 if such works result in a delay of more than 30 days compared to the time required in accordance with Good Industry Practice.

1. Since the concessionaire had failed to carry out his obligations about the O&M requirements in accordance with the provision of the concession agreement and failed to rectify the deficiencies and defects for the month of January 2024within the stipulated time period from the date of issue of inspection reports for the month of February 2024, as stated in our letter referenced 1 above, the concessionaire was also served notice under Clause 18.12 of the concession agreement, as stated in our letter referenced 2, and afforded an opportunity to attend to the deficiencies, defects, and requirements as per the details given in the said letter Ref-2 within 30 days from the date of the notification.
2. Also, it was made clear that if the concessionaire doesn’t meet his contractual obligations within the given time frame, he will have to face more action, or the authority will have to pay for repairs and maintenance. Under Clause 18.12 of the concession agreement, the concessionaire will also have to pay 25% of these costs as damages, or he will have to pay damages for each day of default, up to a maximum of (a) Rs. 10,000/-.
3. The concessionaire has failed to rectify all of the new deficiencies notified for January 2024. We are providing the detailed cost estimate for the unattended defects or deficiencies in February 2024, which the concessionaire will bear the risk and expense for. This is in compliance with Clause 18.12 of the concession agreement, as outlined in Annexure-A. The cost of rectifying the unattended deficiencies is estimated to be around Rs.
4. For the month of January 2024, the recovery of damages for each day of default, up to a maximum of Rs. 10,000 and 0.1% of the estimated cost of such repair as determined by the Independent Consultant in compliance with Clause 18.13 or 18.14 of the Concession Agreement, comes to Rs. Annexure B provides the details.
5. You are requested to please convey the authority’s decision if the authority would be getting the repair and maintenance of the project highway, i.e., unattended deficiencies and defects for the month of January 2024,carried out at the risk and cost of the concessionaire, and recover the aforesaid cost of repair and maintenance from the concessionaire along with a sum equal to 25% (twenty-five percent) of such costs as damages in accordance with the provision of Clause 18.12 of the concession agreement.
6. However, if the authority does not exercise its option to undertake the required repair and maintenance after the expiry of the 30-day period stipulated in Clause 18.12, then we will recommend the recovery of damages from the concessionaire after the aforesaid 30-day period and until the default is cured. We will calculate the damages for each day of default at the higher of two amounts: (a) Rs. 10,000/- and (b) 0.1% of the estimated repair cost by the independent consultant. The recovery of damages will not affect the authority’s rights under this agreement, including termination.

Thank you while ensuring our best services.