Loss of attraction: BMC to take cut in fees to woo contractors

In a bid to woo contractors to open these lots, after six failed attempts, the BMC is now ready to bring down the contractor fees by 30%, even though it would mean a loss of revenue in the range of ₹40,000-₹2,00,000 per facility per month.

Even as the Brihanmumbai Municipal Corporation (BMC) has hiked parking fees for citizens to free up spaces on roads, it is finding it tough to make 25 on-street parking lots operational for the past 1.5 years.

A view of BMC allotted parking area at Peon building, at Byculla, in Mumbai. (Photo by Bhushan Koyande/ HT)

In a bid to woo contractors to open these lots, after six failed attempts, the BMC is now ready to bring down the contractor fees by 30%, even though it would mean a loss of revenue in the range of ₹40,000-₹2,00,000 per facility per month.

The contractor fees to BMC for maintaining every parking lot differs based on the lot’s parking capacity. This is the fourth time the BMC has reduced the fees in 1.5 years.

Of the 25 on-street parking lots, nine were handed over to a contractor during a previous bid. However, at the last minute, the contractor refused to take up the maintenance work, citing unaffordability as the reason for backing out. The remaining 16 on-street parking lots have not found bidders during all six attempts.

“The BMC blacklisted the selected contractor for three years, and confiscated his deposit money of ₹7 lakh. We had to waste our time on refloating the tenders,” said a senior civic officer of the traffic department.

The first time when the civic body floated tenders for maintenance of 88 on-street parking lots, the BMC did not

manage to find bidders for 55 parking lots. Over the course of six bid attempts, the BMC made multiple changes to its payment policy and some of the lots were given out to contractors, but 25 were still not taken.

While earlier the BMC charged the contractor fees assuming 80% of the parking lot would be occupied during the day and 40% at night, it later changed this to assume 60% day occupancy and 40% night occupancy. This was the first time it reduced the contractor fees.

It then brought the fees down by assuming 60% occupancy during the day, but 30% occupancy during the night. It again reduced the contract fee payable to BMC by 20%, which was the third time fees were reduced. The fourth time, which is now, the BMC has proposed to reduce the fees by another 30 per cent, subject to approval from municipal commissioner Praveen Pardeshi.

Pardeshi said, “The BMC expects reducing the fee for the contractor will encourage him to come forward and bid for maintenance of the on-street parking lot. As for the loss of revenue to BMC, our increased fine for illegal on-street parking is good news, because it makes up for the lost revenue, discourages people from illegally parking on-street, and encourages them to use the legal on-street parking lots. Once more people begin using the on-street parking lots, a contractor’s revenue will automatically go up.”