BMC panel returns ₹5,396-cr Gargai dam proposal over 11% cost hike

The proposal was sent back to the civic administration after corporators raised concerns that the dam contract value was about 11% higher than the initial estimate. BJP corporator and group leader Ganesh Khankar raised the issue of the cost escalation and demanded that the cost be brought on par with the original estimate

MUMBAI: The BMC’s much-awaited ₹5,396-crore Gargai dam project on the Gargai river in Palghar’s Wada taluka was referred back by the civic standing committee on Wednesday. The project, considered crucial for Mumbai, is expected to initially add 450 million litres per day (MLD) to the city’s water supply.

BMC panel returns ₹5,396-cr Gargai dam proposal over 11% cost hike

The proposal was sent back to the civic administration after corporators raised concerns that the dam contract value was about 11% higher than the initial estimate. BJP corporator and group leader Ganesh Khankar raised the issue of the cost escalation during the discussion, and BJP corporators demanded that the cost be brought on par with the original estimate.

The suggestion to refer the proposal back, raised by former mayor and seven-time corporator Shraddha Jadhav of the Shiv Sena (UBT), was first taken by Prabhakar Shinde, standing committee chairman. Jadhav said there was no clarity in the proposal on the rehabilitation plan of residents for the affected six villages.

Shinde, while announcing the decision to send the proposal back, said that the committee had a responsibility to safeguard public funds. “The standing committee is like a tijori (vault), and to safeguard the keys of this vault is the duty of the committee members,” he said. “Our job is to save taxpayer money.”

Nineteen votes were cast in favour of referring the proposal back, of which seven votes came from the opposition. While BJP corporators said they were not opposed to the project in its entirety, Shiv Sena (UBT) corporators opposed the proposal.

According to the BMC’s proposal, the project’s original estimated cost was ₹3,006 crore.

In February 2020, the civic body had moved a preliminary proposal to approve the work for ₹3,105 crore. However, after tenders were floated in December last year, both bidders quoted prices higher than the estimate.

Soma Enterprises Limited submitted a bid of ₹3,334 crore, or 10.90% above the estimated cost, while Hindustan Construction Company (HCC) quoted ₹3,496 crore, or 16.28% above the estimate. Following negotiations with the lowest bidder, the civic administration revised the price, bringing the contract value to about 11% above the estimated cost.

The administration’s revised project cost includes expenses related to land acquisition, forest clearances and the rehabilitation of project-affected persons, along with provisions for a two-year operation and maintenance period beyond the four-year construction schedule.

The Gargai project forms part of a broader plan to develop a network of four dams, under which the total water supply could eventually rise to 2,800 MLD by 2050. At present, Mumbai’s daily water demand is estimated at around 4,200 MLD, of which the BMC supplies approximately 3,850 MLD.