Srinagar, June 04:In a significant directive aimed at streamlining financial procedures and ensuring compliance with procurement norms, the Chief Engineer of the Jal Shakti (PHE) Department Kashmir, Er. Mohd. Taj Chowdhary, has instructed all Superintending Engineers and Executive Engineers to review and revise scheme-related financial practices.
The move comes in response to complaints from contractors executing Jal Jeevan Mission (JJM) works, who report prolonged delays in payment settlements and severe financial distress.
In an official circular, Er. Chowdhary highlighted that several contractor delegations have approached his office, expressing concern that their work claims under various Water Supply Schemes (WSS) have remained unpaid for the past 5–7 months. Many contractors have reportedly halted work due to the lack of funds and have requested the release of the security deposit and retention money deducted from their running account bills.
The Chief Engineer referenced the General Financial Rules (GFR)-2017 and the Manual of Procurement of Works-2022, particularly Clause 4.13(ii) pertaining to “Security Deposit / Retention Money”. As per the clause, once the maximum retention amount is reached, half of it should be released upon issuance of the Taking-Over Certificate (TOC), while the remaining half is to be released after 365 days post the Defect Liability Period (DLP) or the final payment, whichever occurs earlier.
Additionally, the circular cites a revised memorandum issued by the Ministry of Finance, Government of India (No. F.1/2/2023-PDD dated 01.01.2024), amending Rule 171(1) of GFR-2017. The amendment standardises the performance security for procurement of works at 3% to 10%, with contracts for goods and services capped at 3% to 5%.
Er. Chowdhary noted with concern that current practices in several cases have led to performance securities of 3%–5% being collected, while retention money continues to be deducted at a flat 10%. This results in a combined withholding of 13%–15%, in clear violation of the stipulated guidelines.
To rectify this, the circular mandates that all project evaluations must ensure the total of performance security and retention money stays within the 3%–10% bracket.
The Chief Engineer emphasised that the release of Security Deposit/Retention Money and Performance Security must align with Government Order No. 77-JK(JSD) and should be handled with utmost diligence to avoid any further procedural violations.
