3 min readMumbaiMar 9, 2026 10:11 PM IST
First published on: Mar 9, 2026 at 10:09 PM IST
The Brihanmumbai Municipal Corporation (BMC) is set to award the contract for the long-pending Gargai Dam project at 8.9% above the civic body’s estimated cost, with the proposal scheduled to be placed before the standing committee on March 11.
According to civic documents, the project’s original estimated cost was ₹3,006 crore. In February 2020, the BMC had moved a preliminary proposal to approve the work for ₹3,105 crore. However, after tenders were floated in December last year, both bidders quoted prices higher than the estimate.
Soma Enterprises Limited submitted a bid of ₹3,334 crore, or 10.9% above the estimated cost, while Hindustan Construction Company (HCC) quoted ₹3,496 crore, or 16.28% above the estimate.
Following negotiations with the lowest bidder, the civic administration revised the price, bringing the contract value to 8.9% above the estimated cost.
However, the total project cost has now risen to ₹5,396 crore, nearly 80% higher than the original estimate. BMC documents attribute the escalation to additional components, including ₹398 crore in municipal surcharges, ₹524 crore in additional charges and ₹108 crore in Goods and Services Tax (GST).
Officials said the revised cost also factors in land acquisition, forest clearances and rehabilitation of project-affected persons, as well as a two-year operation and maintenance period in addition to the four-year construction timeline.
As per the tender documents, the project involves constructing a 69-metre-high dam along with a 1.6-km-long water supply tunnel with a 2.2-metre diameter. Water from the reservoir will be conveyed to the existing Modak Sagar reservoir through the proposed tunnel to augment supply to Mumbai.
The dam site lies in a narrow river valley with a catchment area of around 110 sq km, requiring a compact dam structure, the tender documents state.
The project is expected to initially add 450 million litres per day (MLD) to Mumbai’s water supply. As part of a broader plan to build a network of four dams, the supply could eventually increase to 2,800 MLD by 2050.
Currently, Mumbai’s daily water demand stands at 4,200 MLD, while the BMC supplies about 3,850 MLD.
The project, first proposed about a decade ago, was originally expected to be operational by 2025. However, it was stalled after the Maha Vikas Aghadi government led by Uddhav Thackeray came to power in 2019 and temporarily scrapped it citing environmental concerns.
Civic officials now estimate that the project will take around six years to complete once all clearances are secured and construction begins.
BMC has launched a crackdown against construction sites with daily inspections of the implementation of its 28-point guidelines by ward level staffers. (File Photo) 
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