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SC summons MCD top brass over private contractor issue

The MCD is at loggerheads with the private contractor over the final cost of the Ghazipur Slaughter House Project for several months, reports Satya Prakash.
None | By Satya Prakash, New Delhi
UPDATED ON MAY 11, 2007 11:03 PM IST

The Supreme Court on Friday summoned the top brass of MCD’s Engineering Department and its Chief Financial Officer for some questioning on the disagreement with a private contractor over the final cost of the Ghazipur Slaughter House Project.

A three-judge Bench headed by Justice Ashok Bhan directed the Engineer-in-Chief and the Chief Engineers of Civil, Mechanical and Electrical wings and the Chief Financial Officer to remain personally present in the court on May 15.

The summoning order was passed after MCD counsel Sanjiv Sen clearly told the court that the civic body was not ready to pay more than Rs 114 crore to the contractor, M/s Food Processing Equipment Company Pvt Ltd as determined by IL & FS Infrastructure Development Corporation Limited. The contractor is asking for an amount of at least Rs 150 crore to complete the work.

The Bench said the MCD was not cooperative in finding a solution and unreasonably sticking to the price determined by IL & FS. It asked the MCD and its Engineer in Chief to carefully examine the latest cost chart submitted by the contractor and respond to it in a reasonable and fair manner to find a solution.

The Bench also asked Sen to organise a meeting between the contractor and the Engineer-in-Chief to facilitate a solution.

The Ghazipur Slaughter House Project is hanging fire as the MCD and the contractor are at loggerheads for several months over the total cost of the project.

The court had asked both the parties to prepare separate cost charts and sit together to sort out the differences. But they failed to reach an agreement over the final project cost.

After a Supreme Court appointed firm fixed the cost at about Rs 114 crore for abattoir with a capacity of 4,500 goat/sheep and 500 buffalo a day, the contractor says it is not possible to complete the work at this cost.

The counsel for the contractor submitted that the prices of cement and other raw material have gone up since it undertook the additional work and it was simply not possible for it to complete the work on the old rate.

However, Sen maintained that MCD was not in a position to offer more that Rs 114 crore, worked out by the IL & FSInfrastructure Development Corporation Limited on the court’s order.

Interestingly, the court had made it clear to the contractor and the MCD that the final cost worked out by IL & FS Infrastructure Development Corporation Limited would be final and binding on them.

The IL & FS Infrastructure Development Corporation Limited is supposed to have calculated the final cost of the project taking into consideration the escalation in prices of raw material, additional machinery and new taxes that have come into effect.

As the MCD and the contractor kept finding fault with each other, the June 30, 2006 deadline fixed by the court for the completion of the project expired.

As the court blamed the MCD for the delay, Sen said whatever the civic body did, it was on the court’s orders and not otherwise.

The initial cost of the project was estimated to be Rs 65 crore with a capacity of 2,500 animals a day but it was revised after the capacity was sought to be doubled.

While the contractor is demanding over Rs 150 crore for completion of the work, the MCD initially said the cost would not exceed Rs 106 crore but later agreed to shell out Rs 114 crore after the IL & FS re-worked the project cost.

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