Errant firm that hid info forfeits security deposit
The Brihanmumbai Municipal Corporation (BMC) has decided not to deregister errant road contractor RP Shah Infra Projects Ltd., for concealing information while bidding for a Rs577 crore road contract.mumbai Updated: Oct 04, 2011 02:20 IST
The Brihanmumbai Municipal Corporation (BMC) has decided not to deregister errant road contractor RP Shah Infra Projects Ltd., for concealing information while bidding for a Rs577 crore road contract. Instead, it has decided to confiscate the contractor's security deposit of Rs70 lakh.
This is the second significant step the civic body has taken against contractors, after Hindustan Times began reporting on the pathetic state of Mumbai's roads on July 20. Earlier, it had disqualified the contractor.
The case dates back to late July, when the BMC floated tenders to execute road works and divided the project into nine smaller contracts. RPS Infra was one of the nine contractors short-listed for a contract worth around Rs70 crore.
As per the conditions in the tender, the contractor paid 1% as earnest money deposit (Rs70 lakh) to the BMC.
Satish Badve, chief engineer of the BMC's road department said, "They had bid for two cement concretisation works, which come to around Rs70 lakh. We have forfeited their deposit amount because they did not disclose correct information."
The contractor is currently building retaining walls along the Mithi River, a contract that it had originally bagged for Rs97 crore. The cost of this contract rose to Rs143 crore due to changes in the original plan. This cost escalation enhanced the contractor's bidding capacity and allowed it to bid for the BMC's road contract.
According to civic officials, RP Shah Infra did not disclose this fact while submitting the bid.
While scrutinising the bids the second time round, the department found that the contractor had concealed details of its pending work, which meant that it did not qualify to bid for the contract.
The firm was served a show-cause notice. However, during the show-cause hearing, senior officials felt that the contractor had made an error while submitting the documents, and that there was no vested interest on its part while concealing the information.
Nitin Shah from RPS Infra Projects confirmed that BMC had confiscated its earnest money deposit of Rs70 lakh.
"It was a 'mistake' and we are accepting it. The BMC had already disqualified us from the bidding process and now they have forfeited our deposit. It is against natural justice that one should be punished twice for the same crime."
He also said that the firm wants one more hearing with senior officials in this context.