Covid-19 be declared a 'force majeure' event, demands engineer consultants body
New Delhi, Apr 7 () An engineering professionals' association on Tuesday urged the government to declare COVID-19 as 'force majeure event' for all consultancy contracts under implementation as neither the client nor the consulting companies are able to meet contractual performance in the ongoing projects.
'Force Majeure' clause is a contractual provision that addresses circumstances in which contractual performance becomes impossible or impractical due to events that could not be foreseen and are not within a party's control, the Consulting Engineers Association of India (CEAI) said in a statement.
"The total lock-down, though was inevitable, has major implications on companies, particularly the consulting companies, which have a small capital base. "In present lockdown conditions, it will be difficult for these consulting companies to meet contractual performance for consultancy contracts under implementation or under service including preparation of feasibility report and detailed project report (DPR), detailed engineering, project management by an authority engineer," CEAI President Amitabha Ghoshal said.
The running contracts expiring during the lock-down period should be given an automatic extension of time and there should be a waiver for submission or extension of bank guarantees as provided for in the contracts, during this lockdown period, Ghoshal said.
Provision for payments need to be made for deployment during extended period along with the overheads, the president added.