The Times of India               07.12.2013

VMC terminates contract for gantries, direction signs

VADODARA: Vadodara Municipal Corporation (VMC) has terminated the contract of the agency erecting overhead gantries and direction boards in the city. The VMC commissioner took the step after disputes regarding the payments towards advertising royalty to the civic body.

The VMC commissioner issued an order terminating the concession agreement that the civic body had entered into with the contractor in August 2011. The civic body had earlier rapped the contractor for delay in payment of royalty.

The termination letter states that the agreement had stated that the contractor would pay the royalty when it completes work on the fabrication and installation of the signs or four months after the date of the contract, whichever was earlier. The letter by VMC commissioner Manish Bhardwaj states that the contractor was liable to pay royalty from October 11, 2011, but began doing so only from July 16, 2012.

VMC had issued a notice and also sent other communication to the contractor regarding the issue. The contractor, at the other end, has argued that there were delays on the part of the VMC which led to work starting late and hence the agency was not liable to pay the royalty.

VMC has, however, said the defence was not valid as the contract clearly stated that any delay on the part of the VMC beyond seven days could be considered for an extension of the completion date of the project, subject to VMC's discretion. The contractor has also moved Gujarat high court regarding the issue of royalty. Bhardwaj terminated the contract with effect from Thursday.