Evolution Of Price Adjustment In Public Works: From Composite Andhra Pradesh To The State Of Telangana
- IJLLR Journal
- 2 days ago
- 2 min read
Updated: 1 day ago
Dr. Ram Kishan Rao Chilappagari, Engineer-in-Chief (R&B) (Retd.) and Arbitrator
Ananta Koti Padmanabha Rao Vadladi, Chief Engineer (R&B) (Retd.)
Venkata Narayana Vuppu, Superintending Engineer (R&B) (Retd.)
ABSTRACT
India’s trajectory toward becoming a premier global economy necessitates a robust infrastructure framework; yet, the execution of public works remains tethered to the colonial-era legacy of the Andhra Pradesh Detailed Standard Specifications (APDSS). Building upon the previous research involving the authors regarding Liquidated Damages and Price Escalation (published in the Indian Journal of Law and Legal Research, 2025), this study examines the shift from the rigid quiescence of Preliminary Specification 59 toward a modern "G.O. Regime." While the earlier work addressed the State's power to penalise delay, this study investigates the reciprocal mechanism of compensation payable to contractor for inflationary costs.
Through a longitudinal analysis, the research identifies a systemic administrative "silo" effect. It critiques the departure from consultative norms, where individual departments issued inconsistent eligibility thresholds for similarly situated works, thereby creating a dual-track system that challenges the non-arbitrariness standard of Article 14 of the Constitution of India. By synthesising judicial benchmarks from landmark rulings, the paper argues that ad-hoc executive interventions are a sub- optimal substitute for statutory reform. The authors advocate for a unified price-escalation mechanism within the APDSS to ensure fiscal predictability and align state contracting with contemporary constitutional principles.
Audit findings reveal a significant gap in financial oversight. The non- enclosure of price adjustment calculations noted by the Principal Accountant General (Accounts & Entitlements) [PAG(A&E)] aligns with Comptroller & Auditor General of India (CAG) observations on the Kaleshwaram Project regarding post-tender inclusions. These lapses resulted in excess payments and escalations totalling over Rs. 1,950 crore, highlighting the urgent need for stricter contract management and procedural compliance.
Keywords: APDSS; Price adjustment; Article 14; Administrative Fragmentation; PS 59; Contractual Equity; Fiscal; Audit Compliance; Kaleshwaram Project; Transparency.
