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Mumbai: BMC efforts to recover penalty from contractors of water project stuck in litigation

The chief engineer of BMC’s hydraulic department, A S Tawadia, said: “The civic body has written to all departments not to release any payment of these three contractors.” The High Court will hear the case on November 19.

BMC, BMC to repair toilets, solid waste management (SWM), public toilets, Indian Express  In 2012, the Comptroller Auditor General had pointed out serious irregularities in the project’s implementation. (Source: File Photo)

THE BMC’S efforts at recovering penalty from the three contractors of the failed multi-crore automatic metre reading (AMR) project has been stuck due to litigation. With the contractors executing the projects moving the Bombay High Court last year, the BMC has not able to encash bank guarantees and deposits paid by the companies, said officials.

In 2009, the BMC had launched a Rs 316-crore project to improve the city’s water supply by providing accurate metre readings of water consumed and also ensuring that all consumers install water meters. With the project, the BMC also planned to start 24-hour water supply in Mumbai. The civic body had paid the contractors Rs 276 crore for purchasing and installing of meters. However, the project failed as the contractors — Pratibha Industries (appointed to cater to the city areas), Unity-Axelia (eastern suburbs) and Axelia-Unity (western suburbs) — failed to complete it.

In 2012, the Comptroller Auditor General had pointed out serious irregularities in the project’s implementation. Officials said that 1.35 lakh AMRs were purchased for installation in the next couple of years. The contractors were also given the task of maintenance and taking meter readings for the next five years. But even after more than 11 years, while about 21,000 AMRs are yet to be installed, the contractors have also stopped taking meter readings. At present, besides the contractors, 13 civic officials are facing departmental inquiry in the case. After the project failed to yield the desired results, the BMC initiated action against the contractors and imposed a penalty on all three. It has calculated that Rs 204 crore needs to be recovered from the contractors. A senior official at the hydraulic department said: “Out of Rs 204 crore, we recovered Rs 77 crore from the bank guarantees and deposits submitted by the contractors. Another Rs 84 crore was recovered from the projects that these contractors are executing in other departments. We were about to encash more bank guarantees and deposits worth Rs 67 crore but it was stayed since Pratibha and Unity moved High Court against our action.”

The chief engineer of BMC’s hydraulic department, A S Tawadia, said: “The civic body has written to all departments not to release any payment of these three contractors.” The High Court will hear the case on November 19.

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First published on: 17-11-2018 at 03:14:27 am
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