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Construction Development Board

Construction licence holders shall not be permitted to lease his/her licence

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Posted on 2nd June, 2009

MoW&HS/CDB-2/kg/2005-06/                                                                             30 August 2005

                                                                    CIRCULAR

The 43rd Meeting of Construction Development Board held on the 22nd August 2005, in its effort towards enhancing construction industry, reiterated that construction licence holders shall not be permitted to lease his/her licence to another construction licence holder. This is aimed at curbing unhealthy practices of fronting and also to discourage a contractor from bidding for work in classes and categories other than specified in his construction licence in pursuance to MTI Rule 3 on "fronting".

Therefore, all concerned procuring agencies and construction firms are hereby notified that a construction licensee shall not lease his/her licence to another construction licensee to run the business and engage in fronting.  Letter of authorisation issued by one firm in favor of another firm in the tendering/execution process will be construed as fronting and must be discouraged by all the procuring agencies concerned with immediate effect.  

Non-compliance of above shall be dealt as per rules.

Kinzang Dorji

Chairman, Construction Development Board