Coastal Road: ₹31-crore fine levied on contractors for missing deadline

Mantayya Swami, chief engineer of the project, corroborated the cost escalation but maintained that it was not due to delay but the change in the GST law last July, wherein the GST rate increased from 12 percent to 18 percent

Mumbai: The BMC has levied a total fine of ₹31 crore on three contractors for missing their respective deadlines on the coastal road. The delays have escalated the cost of the project by an estimated ₹226 crore, of which 65 percent has been paid to the contractors so far.

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Mantayya Swami, chief engineer of the project, corroborated the cost escalation but maintained that it was not due to delay but the change in the GST law last July, wherein the GST rate increased from 12 percent to 18 percent.

RTI activist Anil Galgali, who procured this information, was told by the BMC that the coastal road project was divided into three parts. Under Part 1 from Priyadarshini Park to Baroda Palace, awarded to M/s Larsen & Toubro, the original cost has increased by ₹99.79 crore. A fine of ₹8.57 crore has been levied so far.

Swami attributed this delay to work stopping for six months during the pandemic, the Bombay high court’s intervention in July 2019, and the Supreme Court’s subsequent hearing. “A 13-month extension was therefore given, and the deadline was extended from October 2022 to November 2023,” said Swami.

Part 4 from Princess Street to Priyadarshini Park has again been awarded to M/s Larsen and Toubro, and the original cost has increased by ₹63.83 crore. A total fine of ₹7.25 crore has been levied. The date of completion was October 12, 2022, but is now November 26, 2023.

According to Galgali, the penalties levied are very low, given the increase in project cost. “Contractors strive to get such big projects but cannot complete them in time,” he said. “Ultimately, it is the common Mumbaikar’s taxes that fund the increased expenditure.”

Defending tardy contractors, Swami said they were “stakeholders in the project”, and could not be penalised “without any justified reason”. “They have been penalised whenever they missed deadlines,” he said. “But when the delay is not their fault, one can’t levy a penalty.”