Mumbai: BMC haggles with contractors over road work bid amounts

Updated: Dec 26, 2019, 07:37 IST | A correspondent | Mumbai

Contractors to consider reducing amounts; had bid 30 to 40 per cent overestimated cost after BMC changed actual road tender conditions, and added a new 60:40 ratio for payment

Corporators had claimed there is no standard percentage that will be reduced, and every contractor is reducing the amounts according to his whims and fancies. Representation pic
Corporators had claimed there is no standard percentage that will be reduced, and every contractor is reducing the amounts according to his whims and fancies. Representation pic

It seems bargaining does not take place just in the markets of the city, but also in one of the richest municipal corporations of the country, the Brihanmumbai Municipal Corporation (BMC). The civic authorities are convincing road contractors to reduce their bid amounts as corporators had cried foul over the inflated tender cost. Corporators have also alleged that as the BMC doesn't have a standard procedure for the same, the cost reduction is being done as per the whims of the contractors. Contractors are likely to present the new reduced bids by Thursday to the BMC.

After Bharatiya Janata Party (BJP) corporators recently walked out of the Standing Committee meeting over the importance given to contractors and consultants, and the cost of road repair tenders shooting up by about Rs 200 crore, the BMC administration called all concerned contractors to negotiate their bid amounts. Due to various changes to the actual road tender conditions, and a new clause of 60:40 ratio (40% payment would be held back and released partly in a period of 10 years), the contractors have bid 30 to 40 per cent over estimated cost.

'Why negotiate?'

The corporators had said the negotiation process is flawed and questioned the need for negotiations after the bids of the contractors were opened. They claimed there is no standard percentage that will be reduced, and every contractor is reducing the amounts according to his whims and fancies. However, clarifying this, civic officials said that as the quantum of work and the estimated prices are different, even the negotiations are to take place on a case-to-case basis. Congress corporator Ravi Raja, opposition leader at BMC, said, "Why is there a need of negotiating with the contractors and delaying the process? The contractors are favoured even in this case as the amount, which the BMC is going to hold back, is the same inflated price. The administration is wasting the precious time of citizens as the road works are far from starting."

After mid-day reported that 50 tender packages for road works need to be re-drafted, corporators took up the issue saying if this happens, there will be a delay in the process. Despite this, the civic body went ahead with revised contract conditions, which included the 60:40 ratio of payment that led to contractors raising their bid amounts by almost 30% to 40% over the estimated price. Where road works of Rs 50 crore were to be done, the contractors bid Rs 65 crore. While the total of 50 tender packages was estimated to be about Rs 500 crore after the bids, corporators claimed that the contractors have bid Rs 200 crore more.

Contractors assure reduction

After meeting the contractors on Tuesday, the BMC administration has taken an in-principle approval from them (contractors) saying they would reduce the bid cost and are likely to present the new bids by Thursday to the BMC. A senior civic official said, "The contractors who had bid high, upto 40%, have agreed to come down to 27% over the estimations. But only after the reduced cost is given in writing will we be able to know how much reduction is there."

Chief Engineer of Roads, Sanjay Darade, was not available for comment.

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