Aaditya Thackeray alleges city road concretisation cost inflated by 66%

Shiv Sena (UBT) leader Aaditya Thackeray on Friday alleged a scam in the contracts awarded for concretising 397 km of roads in Mumbai at a cost of ₹6,079 crore. Questioning the decisions on the tenders, he said the contracts were awarded at a 66 percent higher cost and demanded that they be scrapped

Mumbai: Shiv Sena (UBT) leader Aaditya Thackeray on Friday alleged a scam in the contracts awarded for concretising 397 km of roads in Mumbai at a cost of ₹6,079 crore. Questioning the decisions on the tenders, he said the contracts were awarded at a 66 percent higher cost and demanded that they be scrapped.

HT Image

Thackeray, at a press conference in Shiv Sena Bhavan, came down heavily on the Eknath Shinde government, alleging that it had been looting Maharashtra and Mumbai in various ways while creating a smokescreen by engaging people in emotive controversies such as those related to icons Chhatrapati Shivaji Maharaj and Mahatma Phule.

Chief Minister Shinde recently announced his plan to make Mumbai’s roads free of potholes by concretising 397 km of roads at an expenditure of ₹5,000 crore. The cost later shot up to ₹6,079 crore. Thackeray raised several questions on this.

“For concretisation of 400 km of roads, tenders worth ₹5,000 crore were floated in August 2022,” he said. “But they got no response from bidders and had to be scrapped. Then new tenders were floated in which the scheduled rates for road work were revised, which escalated the rates by 20 percent. Thus, the cost of 400 km of roads went from ₹5,000 crore to over ₹6,000 crore.”

Thackeray explained the arithmetic that led him to arrive at the 66 percent escalation figure. “Earlier, contractors used to bid 20 percent less than the estimated price,” he said. “However, in the second tender, the scheduled rates gave an approximately 40 percent hike to contractors, since input cost escalation was allowed by 20 percent in addition to the 20 percent hike by contractors in their bid amount. Besides that, GST, which used to be part of the contractors’ quotation, will now be charged by them at 18 percent over and above the tender price. The lowest bidders have quoted about 106 percent of the estimated price. Thus, with payment of GST, the total additional benefit to contractors is 66 percent.”

Thackeray also questioned the project itself. “Looking at the sheer volume of the work called for to concretise 400 km of roads, it will take about six years to complete,” he said. “The BMC currently has no elected representatives or elected body and is working under an administrator, At such a time, who gave approval to the project? Who is giving orders—CM Eknath Shinde or Super-CM Devendra Fadnavis?” he questioned sarcastically.

Thackeray also alleged that there was a cartel in the road contract scam, as five different companies had bid for all five packages, and surprisingly every company had won one package by quoting a different price for each.

Following the allegations by Thackeray, the BMC released a press statement on Friday evening stating that its tendering process for concretising 397 km of roads was “transparent”. Justifying the cost escalation of 17 percent in the new tenders, the civic body said that the prices of raw materials had increased a lot from 2018 to 2022, and hence the standards of prices were changed in the tender. The BMC explained that companies had showed unwillingness to bid for the previous tender owing to the lower prices of raw materials set by it.

Explaining the issue of cost differences between various bids from the same bidder, the BMC said that since the areas and the geographic conditions were different for different areas, bids would not be the same in all packages. On Thackeray’s allegation of why narrow roads were being concretised, the BMC said that the island city had narrow roads but very high VIP movement, and hence the work was necessary.

The BMC, on November 25, 2022, had floated tenders worth ₹6,079 crores for concretising nearly 397 km of roads in Mumbai. The earlier ₹5,800-crore road-concretising tender process that was invited in August 2022 and cancelled by the BMC on November 1, 2022 was the highest in the history of the civic body. Civic officials had then said that the BMC planned to review the reasons for the poor response and, without compromising on quality, make the necessary changes, invite fresh terms and stipulate fresh conditions. The tender on road concretisation was accordingly reinvited in November 2022.