Case Study 4 - Choosing a Contractor Before the Monsoon
The zila parishad of a district must desilt a village pond measuring 150 m × 80 m × 2 m before the monsoon, expected on day 40 from today. Machines can work side by side without interfering, and idle days are not paid. Contractor A can remove 600 m³ a day at ₹45,000 a day; contractor B can remove 400 m³ a day at ₹28,000 a day. Completion within 25 days is required, so that the embankment can settle and the inlet channel repaired; the contract carries liquidated damages of ₹8,000 for each day of delay beyond day 25, and no bonus for early completion. The parishad has a sanctioned budget of ₹20 lakh. Separately, the project note claims that the desilted pond, filled to 1.5 m depth, will irrigate a command of 40 hectares at 6 cm per irrigation.
1. Compute the cost of each of the three deployment options including liquidated damages, and recommend one.
Read the worked answer
Volume to be removed = 150 × 80 × 2 = 24,000 m³.
| Option | Output/day | Days | Hire cost | Delay | Damages | Total |
|---|---|---|---|---|---|---|
| A alone | 600 | 40 | 40 × 45,000 = 18,00,000 | 15 days | 1,20,000 | ₹19,20,000 |
| B alone | 400 | 60 | 60 × 28,000 = 16,80,000 | 35 days | 2,80,000 | ₹19,60,000 |
| A + B | 1,000 | 24 | 24 × 73,000 = 17,52,000 | 0 | 0 | ₹17,52,000 |
Recommendation: deploy both. It is the only option that meets the 25-day requirement, and it is also the cheapest - cheaper even than B alone, whose low rate is destroyed by the days B sits idle at 400 m³ against a 25-day deadline.
The lesson to state explicitly: compare options on cost per cubic metre delivered on time, not on daily rate. A's rate per m³ is ₹75, B's is ₹70, combined it is ₹73 - yet combined wins because damages and schedule dominate.
Residual risk: 24 days against a 25-day limit leaves one day of buffer and a 16-day margin before the monsoon. That margin is the project's real insurance and should not be spent on other works.
2. On day 13, after 12 full working days, B's machines fail and B's output halves to 200 m³ a day for the rest of the job. Compare continuing with A and B against hiring a third contractor C who can add 300 m³ a day at ₹15,000 a day, and decide.
Read the worked answer
Work done in 12 days = 12 × 1,000 = 12,000 m³. Remaining = 12,000 m³.
Option 1 - continue with A + B. New output = 600 + 200 = 800 m³/day. Time = 12,000 ÷ 800 = 15 days, finishing on day 27 - two days late. Cost = 12 × 73,000 + 15 × 73,000 + 2 × 8,000 = 8,76,000 + 10,95,000 + 16,000 = ₹19,87,000.
Option 2 - bring in C from day 13. Output = 600 + 200 + 300 = 1,100 m³/day. Time = 12,000 ÷ 1,100 = 10.9, i.e. 11 days, finishing on day 24 - on time. Cost = 8,76,000 + 11 × (73,000 + 15,000) = 8,76,000 + 9,68,000 = ₹18,44,000.
Decision: hire C. It saves ₹1,43,000 and meets the deadline, and it also keeps the total inside the ₹20 lakh budget, which Option 1 only just does (₹19.87 lakh) before any cost overrun.
Why the counter-intuitive result: A and B are being paid full day rates for reduced output - their effective cost is ₹91 per m³ in Option 1, while C delivers at ₹50 per m³. Standing daily charges, not the new contractor, are the expensive part.
3. Test the project note's claim that the pond will irrigate 40 hectares at 6 cm per irrigation, and state what the parishad should do about the claim.
Read the worked answer
Storage at 1.5 m depth = 150 × 80 × 1.5 = 18,000 m³ = 1.8 crore litres.
Water needed per hectare at 6 cm = 10,000 m² × 0.06 m = 600 m³.
Area irrigated once = 18,000 ÷ 600 = 30 hectares - already below the claimed 40.
Allowing for conveyance and application losses. Field channels and unlined distributaries typically lose a substantial share; at a modest 25% loss the useful volume is 13,500 m³, irrigating 22.5 hectares. The realistic command is therefore roughly half of what the note claims.
What the parishad should do:
- Correct the project note before it is used to justify the ₹20 lakh outlay; a wrong command area becomes a wrong beneficiary list, which becomes a grievance.
- State the claim precisely as 'one irrigation of 22–30 hectares', not 'a command of 40 hectares'.
- If 40 hectares is genuinely required, plan for a second filling from the canal system, line the field channels, or enlarge the pond - and cost those options before tendering the desilting.