Raimundo do Rosário
Au Kam San
Whether or not to adopt compensatory payments for violation of contract provisions was the main focus of yesterday’s Legislative Assembly (AL) plenary meeting.
Raimundo do Rosário, the Secretary for Transport and Public Works informed that the government intends to apply Law No. 74/99 when contractors violate their contracts. He said, “Law No. 74/99 actually applies heavier fines to contractors when they delay construction.”
In his view, adopting compensatory payments for violation of contract provisions will lead to an increase in contractor’s prices.
Secretary Rosário also admitted that several large-scale projects, such as the elevated train project have been delayed in part due to ineffectiveness and inefficiencies in the department. He also acknowledged that no company has been fined more than half of the total value of any contract because “Macau doesn’t nurture a culture of fines.”
For lawmaker Au Kam San, “public contracts follow a threefold paradigm: first, they are delayed; second, they go over budget; third, their quality turns out to be bad.”
San asked the Public Works and Transport Bureau (DSSTOP) whether they will amend the regulation. His question followed the bureau’s admission that existing regulations need to be changed, although changes to compensatory payments are not needed.
Addressing Secretary Raimundo do Rosário, Au Kam San questioned, “you are doing your job, but once you leave your position, will there be continuity of such work? How can it just depend upon your services?”
According to the DSSTOP, the execution rate of the investment budget is 85 percent, which, in the secretary’s opinion, provides evidence that the department has put considerable effort into the work.
Delegates from the DSSTOP gave an example of the final payments which contractors will have to make under the two different regulations, namely the Law No. 74/99 and the compensatory payments scheme. The latter remains under deliberation.
“Suppose the price of the contract is MOP100 million. Each day the company is late on completion of construction, it will be fined one percent of the total price, which results in MOP100,000. However, it will only pay MOP17,000 if the compensatory payments are adopted.”
The lawmakers acknowledged the efforts of the government in the area of Public Works, however they also remarked that contractors should not be the only ones to be blamed. They recommended DSSTOP to undertake internal reviews. Staff reporter
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