Even as waste management experts and major global cities shy away from it, the civic body in 2009 had agreed to pay tipping fees for picking garbage at the gate of the dumping ground and processing/dumping it - of Rs. 3,000 crore for 25 years to a private developer at Deonar.
The developer had asked for fees of Rs. 550 per tonne of garbage with 8% escalation cost for composting and Rs. 525 per tonne with 8% escalation for sanitary landfill.
The tender was awarded just one month after the National Buildings Construction Corporation (NBBC) offered to do the same job without charging a tipping fee. It had then argued that tipping fee should not be more than Rs. 300 per tonne.
It was also handed out one month after the Kanjurmarg dumping ground project was awarded, where the consultant had quoted a substantially lower tipping fee, at least 115% less for composting and 103% less for landfill.
In Kanjurmarg, the developer was charging tipping fee of Rs. 1,402 crore for processing 2,000 tonnes per day (TPD) for 25 years.
A study commissioned by the state government noted : The difference in the financial bids received for Deonar and Kanjur projects is significant, with Deonar bid financial outflows being almost twice that of Kanjur bid for similar facilities.
It also raised questions on BMC's multiple financial negotiations with the selected bidder. Aware of the lower tipping fees charged at Kanjurmarg, the BMC officials held a meeting with the consultant for Deonar for negotiations. At that time, the developer agreed to reduce his tipping fee from Rs625 to Rs550 per tonne during the first year.
In return, the BMC had agreed to hand over 100% clean development mechanism benefits to the developer (granting additional benefit of Rs66 crore).
A senior government official said one of the biggest lacunae in the bidding process for Deonar was that the BMC didn’t cancel the tender after both interested parties failed to get requisite score in technical qualification. Instead, it sought additional information on the basis of which the consultant was selected.
“The terms of reference for this report were limited and it did not fix responsibility. But, it's a starting point as it confirms that this scam is worth thousands of crore,'' said Babba Siddiqui, who demanded SIT in the scam in the assembly.