Vadodara boat tragedy: VMC terminates contract of Kotia Projects

According to details shared by VMC, Kotia Projects was in 2015 disqualified by the civic body, as it primarily manufactured snacks and had no prior experience with such leisure infrastructure projects. Prior to the VMC project, director Bipin Kotia of Kotia Projects ran Kotia Foods Limited that since 2007 manufactured dry packaged snacks.

As per records, on October 20, 2015, the VMC’s futuristic planning cell floated an expression of interest for the redevelopment of Harni Lake on a public-private partnership model. Two firms bid for the contract – Vadodara-based All Mac India and Kotia Projects. None, however, qualified.

The reason cited at the time for Kotia Project’s failure to clear the pre-qualification stage was that it was newly formed, had zero turnover, had no previous experience in the leisure infrastructure sector and had not submitted any tax documents. When contacted, VMC Commissioner Dilip Rana said, “The firm had not attached the required income tax documents. In fact, both firms were disqualified and a re-tender was undertaken. In the second round, Kotia Project returned as part of a joint venture (JV) with another firm and submitted the required documents. The JV qualified and was awarded the contract.”

The proposal of the VMC, approved by its Standing Committee in September 2016 and thereafter by its General Board the same month, stated: “On December 30, 2015, the civic body received (reinvited) bids from Kotia Projects and another firm, Manglam Construction Company… Both bidders have qualified in the evaluation stage and also made a presentation on April 22, 2016, based on which the final scope of work as well as price bid has been ascertained and the financial bids invited… Under the contract, the developer will be responsible for the operation and maintenance of the premises for a period of 30 years…”

In lieu of “rejuvenating” the lake, the developer received three plots in its periphery — plots 163, 105 and 135, measuring 5,686 sq m, worth approximately Rs 17 crore at a rent of Re 1 for 30 years.

According to VMC’s proposal, only Kotia Projects submitted a proposal on August 23, 2016, offering a lump sum premium amount of Rs 3.01 lakh per year to the VMC. The contract with the VMC allows the contractor to charge entry fee from visitors and boating charges per person, with the explicit mention of mandatory life jackets in the fee list approved by the VMC.

In return, the company received a waiver from all VMC taxes for five years and the rights to make commercial advertisements in a space of 450 sq m on acquiring the completion certificate for the project. The contract also has a clause that stated that “in case that the developer exits the site before the completion of the 30-year lease period, the entire property will be transferred to the VMC by default”.

Congress leader of Opposition in the VMC, Ami Ravat, who had demanded a vigilance inquiry against the project in 2016, said: “The work of development of ponds on PPP model was put forth in (VMC’s) General Board on February 20, 2016, and 14 of the 76 councillors voted against it… and instead (said these) should be developed by the municipal corporation. The same was not approved by way of majority vote…”

The builder was to spend Rs 5.4 crore to develop the pond. “Considering the rates submitted against usage of various facilities, an average visitor will spend Rs 500 per day, and considering 200 visitors a day, the average income per day will be Rs 1 lakh and annual income will be Rs 3.65 crore. In addition, other income sources for the developer/contractor will be rent from the exhibition hall and auditorium. The contractor will thus recover its entire cost just in the first one or two years. On the other hand, VMC will get Rs 3 lakh per annum and the facilities developed by the contractor will barely have any scrap value after 30 years,” Ravat said.
With the VMC on Friday sealing the Lake Zone, the municipal commissioner said: “We have sealed the premises and terminated the contract with the company… What should be done in the future with the lake and the asset that now belongs to VMC, will be considered later.”

Rana also said that as per VMC records, the fire department had conducted regular inspections at the Lake Zone and the futuristic planning cell had also issued a notice regarding maintenance of safety norms. He, however, did not share the details of this notice.

Meanwhile, speaking to mediapersons, Police Commissioner Anupam Gahlaut said that as per the contract documents, all partners in Kotia Projects were “equally liable” for the incident.

He added: “The FIR has booked 18 people, whose names were primarily found in the contract documents… We have learnt that when the company was set up, it had four directors. When the VMC signed a contract with them in 2016, two original directors had left and four new were added. In 2018, nine more directors added to the list. The contract clearly stated that ‘it is also agreed by and between the parties that all continuing partners and new partners shall become absolute owners of all assets, contracts and liabilities of M/s Kotia Projects…’ They are partners… and equally liable for any untoward incident.”

Gahlaut further said that one of the accused directors in Kotia Projects, Hitesh Kotia (55), has died. “We are verifying the addresses (of the directors/partners) as the contracts are old. We are also examining the firm’s contracts with the VMC. Further, we have come across sub-letting of work that was awarded to Kotia Projects… Teams are working on ascertaining who actually operated the boat and if they had license.”

“The VMC executive engineer is the complainant in the case but as we progress in the investigation, if it emerges that there was negligence or guidelines were violated, everyone will be booked…,” he added.