HC clears way for Kalu Dam project after 10-year stay

The interim stay order, imposed in December 2016, had restrained KIDC from awarding contracts for the dam’s construction

MUMBAI: The Bombay High Court on Wednesday lifted a stay order imposed a decade ago and allowed the Konkan Irrigation Development Corporation (KIDC) to invite fresh bids for the construction of the long-stalled Kalu Dam project in Thane district. The dam, proposed for Murbad, is expected to provide an additional 406.55 million cubic metres of water to the Mumbai Metropolitan Region (MMR).

The interim stay order, imposed in December 2016, had restrained KIDC from awarding contracts for the dam’s construction. (HT Archive)

A division bench of justices Manish Pitale and Shreeram Shirsath passed the order on a plea filed by the KIDC, through advocate Priyanka Chavan. The interim stay order, imposed in December 2016, had restrained KIDC from awarding contracts for the dam’s construction.

The project, approved in 2009, has been held up due to prolonged legal battles over the submergence of forest land, tribal rehabilitation and a multi-crore irrigation scam involving the original contractor.

The Maharashtra government approved the project in July 2009 and appointed the Mumbai Metropolitan Region Development Authority (MMRDA) as the nodal agency. In May 2010, the construction contract was awarded to FA Enterprises.

However, work on the dam never began amid allegations that FA Enterprises had manipulated the bidding process using forged documents and dummy companies.

In September 2016, amid allegations of widespread corruption in irrigation contracts, the state government cancelled the contracts, including the one awarded to FA Enterprises for the Kalu Dam.

KIDC subsequently terminated the firm’s contract, prompting it to approach the high court. In December 2016, the court restrained KIDC from awarding the project to another contractor while the dispute remained pending.

Seeking to lift the stay, KIDC’s counsel, senior advocate Rajeev Chavan, told the court that the prolonged delay had pushed up the project’s estimated cost to around ₹4,010 crore.

Chavan argued that the dam was crucial to meeting the MMR’s growing water needs. With the region’s population increasing, demand for water for domestic, industrial and other uses had also risen, making it necessary to revive the long-pending project, he submitted.

Accepting KIDC’s request, the high court lifted the stay, allowing the corporation to begin a fresh tendering process. However, it clarified that FA Enterprises would also be eligible to participate in the bidding.