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This is an archive article published on February 1, 2011

Tunnel project: Standing committee demands report on cost escalation

The Standing Committee on Monday directed BMC’s water supply department to present a report on the reasons for the cost escalation in the Veravali-Yari Road tunnel project.

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The Standing Committee on Monday directed BMC’s water supply department to present a report on the reasons for the cost escalation in the Veravali-Yari Road tunnel project.

Cost escalations in the project termed as ‘variations’ are usually due to an increase in raw material or labour costs or delay in project execution. Typically any variation in the cost of a project has to be approved by the Standing Committee which is a statutory body of the BMC.

The water supply projects department has asked for an extension of six months and an additional provision of Rs 29 crore for the project which was initially expected to be completed by December 2010. However,the administration has already spent the additional variation for the project without Standing Committee’s approval.

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Standing Committee members have asked for a detailed report on the reasons for the delay. “We want to know why the additional amount of Rs 29 crore was spent on the project without our permission,” said Niyaz Vanu,a member of Standing Committee.

“The cost increase was undertaken under the cost contingency term in a contract,” said Aseem Gupta,Additional Municipal Commissioner. BMC started construction on the 6.1 km tunnel from Verawali to Yari Road in 2007. This tunnel will be maintenance-free for 15 years and will facilitate uninterrupted water supply to the city with better pressure.

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