Government agencies engaged in infrastructure projects were plagued by the risk & cost syndrome to penalize the contracting agency unable to complete the work on time. The excess amount incurred by the government in completion of the balance work through another agency was to be recovered from the defaulting contractor. However, invariably in all cases the cancellation of the contract by the government agency was declared to be illegal by the Arbitrator. Consequently, the claims of the department towards risk & cost amount were rejected and to the contrary the defaulting contractor is awarded damages. The paper discusses an alternate strategy by eliminating the approach of Risk and cost.
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