AMC CONTRACT WITH KONE ELEVATORS

NEGOTIATION OF AMC (2008-2011) RATES WITH KONE ELEVATORS INDIA PRIVATE LTD.

On 02 Dec. 2008, KONE Elevator India Private Ltd. forwarded a comprehensive AMC for six lifts in the Society for 2009 quoting Rs.2,57,555/- as the new charges applicable. On 09 Dec. 2008, the Society pointed out to KONE that the increase of 15% over last year’s (2008) AMC charges was exorbitant, unsubstantiated by facts on ground, contrary to all logic and arbitrary. The following grounds were enumerated to reinforce the Society’s contention:-

(a) Decrease in price of petrol and diesel by Rs.5/- and Rs.2/- per litre respectively. Hence cost of procurement of materials and conveyance expenses had come down.

(b) Reduction by 50% in the price of steel; cost of materials accordingly affected.

(c) CENVAT has been reduced by 4% across the board

(d) Inflation is down from 11% to 6.5%.

3. It was emphasized that the points in para. 2 ibid have had a cascading effect on cost of spares, material and transportation. There should, therefore, be a reduction in AMC charges for 2009.

4. On 22 Dec 2008, Mr.Sudhir Lakhwara of KONE came to the Society office to negotiate the AMC charges for 2009. The Society was represented by the Secretary, Mr. D. V.Gupta, Mr. N. N. Srivastava, Mr. K. Ramachandran and Mr.Suresh Srivastava. It was strongly highlighted that KONE had made an offer in Nov. 2006 for AMC for six lifts for a period of three years from 01 Jan 2007 to 31st Dec 2009 at a rate of Rs.2,22,163/- for each calendar year, which was accepted by Mr.Rajeev Manchanda. How then, this offer was converted to yearly AMC is beyond comprehension of the present MC; particularly as the rates quoted and gained by the Company were beneficial only to KONE and the Society remained at a disadvantage. Mr. Sudhir Lakhwarra said he would check the records available with KONE and get back to the Society. He did, however, mention that rates are usually negotiated with the MCs of Societies and bribes accepted by MC members at the cost of overlooking the Society’s interests.

5. On 25 Dec 2008, Mr. Nirmal Kumar of KONE along with Mr. Sudhir Lakhwara and Mr. Abhishek arrived in the Society Office at 1530 hrs to negotiate AMC 2009 with the MC. Upon insistent bargaining by the MC, KONE agreed to sign an AMC for a three years period albeit the rates offered by the Society were not agreed to. The MC was told by Mr. Nirmal Kumar that KONE can at best offer the following comprehensive AMC rates: -

(a) 2009 - Rs.2, 35,000/- (an increase of 4.5% over AMC charges of
2008)

(b) 2010 - Rs.2, 35,000/- plus 4.5%

(c) 2011 - An increase of 4.5% over contract rate of 2010.

6. The MC made the following counter offer:-

(a) 2009 - Rs.2, 30,000/-

(b) 2010 - An increase of 4.5% over contract rate of 2009.

(c ) 2011 - An increase of 4.5% over contract rate of 2010.

NOTE: - KONE officials stated that the Company cannot reduce AMC charges beyond those mentioned in para. 5 (a) to (c) above. The KONE’s offer was then accepted. Mr. L. C. Tomar asserted that we must still write to KONE’s head office in Chennai to reconsider the Society’s offer of reduced rates.

7. On 28th December 2008 KONE officials forwarded a fresh draft Contract for AMC for six lifts for the period 2009 to2011 vide their letter dated 26th December 2008. The Society raised the following objections/observations for modifications/rectification.

(a) Para 4.0 The contract price negotiated included only the existing taxes imposed on the Company. Mention of the customer and Company’s supplier in the clause is redundant and must be deleted.

(b) Para 5.1 The mode of payment must be quarterly advance. The Para may be modified as “ The contract price is inclusive of taxes & duties for the period and must be paid in quarterly advance within 7 days of receipt of the Company’s bills”.

(c) Para 5.2 It should not be applicable as payment will be in advance. Contract of 2007 is relevant where no such condition exists. In addition, interest rates applicable for any delayed payments must conform to the current rate of
12 % being charged by the banks in India.

(d) Para 6.3 Considering the vintage of the equipment, at least 12 annual visits must be made by Company’s technicians to systematically inspect, adjust and lubricate the parts of the elevators to the extent necessary to maintain the elevators in satisfactory working order.

(e) Para 6.5 Include “All requirements of insurance / Govt. will be complied with by the Company.

(f) Para 9.8 Reframe as “The Company shall indemnify the Society of accidents / injury to its employees or third party during maintenance of lifts.

(g) Existing Para 9.8 May be renumbered to read 9.9.

(h) Para 6.3 The minimum number of visits by KONE’s representatives for preventive maintenance used to be eleven initially and were reduced to eight per year without assigning any reason since 2006. Considering the vintage and condition of the equipment, it should again be reverted to at least twelve, if not more.

(i) Para 6.7 Nil. Inclusion of ‘Nil’ clause is confusing and must be deleted. Alternatively, the Para could include the provision of TDS as applicable.

(j) Para 6.8 General Exclusions. Sub Para a (i) read Elevator Car Enclosure (Inside) in the contract of 2007. The word (inside) has now been removed for no explicable reason. This may be included.

(k) There was an important Note after Clause 9.8 in the AMC of 2007 that read “The Kone Elevators India (P) Ltd will ensure that under no circumstances the both lifts of same block will not be under breakdown more that six hours at a time”. The Note is missing from the fresh Contract forwarded by Kone. This may please be included.


8. Mr Sudhir Lakhwara promised to project the Society’s stance to his superiors in the Company and get back to the Society as soon as possible.

SECURITY LAPSE

Although holding of family functions in common areas within the precincts of the Society are banned in the Society norms circulated in May 2001. Past and present Management Committees as a gesture of goodwill were overlooking the practice. However, on the night of 24 Dec2008, a load carrier Tempo Regn No G 6358 entered the Society premises through the main gate accompanied by Mr Amrik Singh, f / o Mr Gurmaan Singh, who was organising a private family function on 25 Dec 2008. The Tempo Regn No G 6358 left the Society premises at 1035 PM through the main gate. However, six labourers stayed on in the Society premises without permission of the Managing Committee and slept in garage No 29. At 6.45 AM on 25 Dec 2008, the Secretary was informed that the labour had stayed on within the Society precincts at the behest of Mr Gurmaan Singh. At 8 AM on the same day another Tempo with Regn No DL 1LG 3904 arrived with load for Flat No 80. The Secretary instructed the guards at the main gate not to permit the vehicle inside before 9 AM. At 8.25 AM, Mr Gurnaam Singh accompanied by his father and Col TS Anand, Retd came to the Society office to insist that the vehicle be permitted inside as an exception to the norms followed by the Society. When the Secretary declined to entertain the request, the Secretary was accused of interfering in the former’s religious duties and told that ‘he would have to pay a heavy price for the same’. The whole security lapse on part of Mr Gurmaan Singh and his father was thus portrayed as a communal incident. On an earlier occasion too, labour working in his flat had been allowed by him to stay in the premises beyond 6 PM, despite objections by the MC.

At 2335 hrs, a gentleman claiming to be a senior police officer and brother of the Resident, went to the Main Gate and attempted to intimidate the security guards on duty. He asked them to permit a load carrier tempo to enter the Society premises to take away the tentage and other loads brought in for the function. The guards rightly refused to permit the tempo to enter the Society premises. He then used the intercom at the Main Gate to contact the Secretary and repeated the request. Upon being informed of the Society norms of not permitting any load carriers to enter the Society premises between 6 PM and 9 AM, he threatened the Secretary that ‘it will not be good for you’.



In the light of the security lapses, the threats issued to the Secretary on 25 Dec 2008, and the fact that the facility of using common areas for personal functions is being abused, the Managing Committee has decided that henceforth no personal functions, religious or otherwise, will be permitted in the common areas of the Society (including car parking space under stilts).

CALL FOR 'SHRAM DAAN'

Dear Members,

We are finding it difficult to hire labour for painting the rusted pipe ends and other metallic structures on the roofs of all the buildings. It is therefore a sincere call on the denizens of Din to contribute labour. Please come and help us paint the metallic structures on Sunday, the 7th December 2008 between 1030 hrs and 1300 hrs.

It would help the cause if you can bring your own paint brush. Those willing to ‘Shram Daan’ are requested to confirm to Society office by 1800 hrs on Saturday, the 6th Dec 2008.

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EXPENDITURE FOR THE MONTH OF NOV 2008

STATEMENT OF ACCOUNTS AS ON 30th NOVEMBER 2008.

1. Electricity Bill for common area for the Oct. 2008 Rs. 30,990/-*

2. Electric spares (including fuse, starters etc.) Rs. 1,513/-

3. Service & Maintenance of Generator Rs. 9,938/-

4. Diesel for Generator Rs. 5,008/-

5. Material for repairs of Pump station, electric sub-station,
Roof of Transformer room and garages of Block C Rs. 29,676/-

6. Repair of main Pumps & submersible pumps Rs. 10,277/-

7. Water Tap Rs. 225/-

8. Water Reservoir covers, battery bracket Rs. 3000/-

9. Security Bill for November 2008 Rs. 36,296/-

10. LPG Gas for Guard room Rs. 200/-

11. MTNL Rs. 1,004/-

12. Salary to employees Rs. 18,850/-

13. Overtime paid to employees @ Rs.400/-

Shri Ram Kishan
Shri Gauri Shankar
Shri Sarad
Shri Narayan Rs. 1,600/-

14. Garbage Removal Charges Rs. 500/-

15. Library fee Rs. 688/-

16. Conveyance to Member & staff Rs. 154/-

17. Photostat for letters to Members Rs. 80/-

18. Postage Rs. 135/-

19. Repair of Cycle Rickshaw Rs 150/-

20. Printing of I. cards & purchase of office stationery Rs. 250/-

21. Labour Charges (including painter & carpenter) Rs 22,491/-

22. Plants including cartage Rs. 1,050/-

23. Sweet earth Rs. 1,000/-

24. Cleaning material Rs. 480/-

25. Chair recanning & polishing for Flat no. 19. Rs. 1,500/-

26. Incidental expenses in connection with Rana meeting Rs. 120/-

27. LAN Card for computer Rs. 400/-

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Total : Rs.1,77,575/-
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Members desirous of checking details are welcome to the Society’s office and check the accounts on any day between 10 AM to 5 PM. The right of the Members to demand inspection of all Society’s accounts maintained by the MC will be respected at all cost.

Suggestions / recommendations to improve accounting procedures and introduce transparency are welcome and shall be taken in the right spirit.




*Total Electricity Bill for the month of October 2008 Rs.1,98,186/-