MHADA courts self-doubt

MUMBAI, MARCH 24: A special meeting of the MHADA executive body held to decide whether or not to appeal in Bombay High Court against an a...

MUMBAI, MARCH 24: A special meeting of the MHADA executive body held to decide whether or not to appeal in Bombay High Court against an arbitrator8217;s decision to grant an additional Rs three crore to construction company BG Shirke remained inconclusive today. MHADA now wants more time to finalise its move, apparently to enable its new vice-president Gorakh Megh to get acquainted with the matter.

MHADA had to pay an additional Rs three crore to Shirke8217;s company for pile foundation work, as per the arbitrator8217;s decision agreed to by both parties. The arbitrator, senior bureaucrat and ex-secretary of PWD RT Atre in his report submitted last December had recommended the money be paid to Shirke. MHADA then paid the money 8220;under protest,8221; but is now alleging foul play.

As per provisions of the Indian Arbitration Act, MHADA could move HC against the arbitrator8217;s decision in this case till April 4, 1999.

Former MHADA vice-president Subodh Kumar had forwarded the proposal to move HC against the arbitrator8217;sdecision. Interestingly, principal secretary of the urban development department K Nalinakshan too wrote a letter to MHADA president Vilas Avachat today, asking MHADA to approach court.

However, MHADA is unlikely to appeal in the HC, given the weak case it has in the matter. Though housing secretary Govind Swaroop said a final decision would only be taken after a few days, he admitted MHADA has no clear advantage in this case.

Also, the new CEO Megh, who asked questions about the arbitrator8217;s role in today8217;s meeting, was told that the arbitrator8217;s decision was not prejudiced and that the arbitrator had not exploited his position. The decision was also legally sound, Megh was informed. In addition, Avachat said MHADA didn8217;t have a strong case to appeal in court. The lone dissenting voice in the meeting was that of chairman of Repairs and Reconstruction Board Madhu Chavan, who strongly objected to the decision.

Finally, Swaroop said Megh should be given time to consult all MHADA administrativeofficials.

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The MHADA administration had recently opposed tooth and nail Housing Minister Suresh Jain8217;s directive to sanction construction cost of Rs 750 per sq ft for tenements being constructed by Shirke at Mankhurd and Sion, when the agreement between MHADA and Shirke was that the rate would be Rs 750 if work is completed on time and Rs 700 per sq ft otherwise. Though the deadline is June 31, 1999, Jain insisted that since Shirke had completed over 80 per cent work, he should be paid at the rate of Rs 750 per sq ft.

Sources revealed that the MHADA administration wants to take every chance to save money now. The Authority, which had around Rs 600 crore as cash reserves a year ago, finds itself drained of its funds after having given the Rs 250 crore-worth project to Shirke for building 10,000 transit tenements. Besides, it has been asked to dole out an additional Rs 300 crore to SPPL for the state government8217;s slum housing scheme. The MHADA president, however, recently presented a surplus budget of overRs 340 crore, most of which surplus is in terms of assets and not cash.

However, apart from the project awarded to Shirke, MHADA has undertaken no other housing construction work in Mumbai for more than a year. Its latest proposed project to construct low-income and middle-income houses on the Modern Mill and Matulya Mill land in the city has also been shelved as tenders received failed to qualify on technical grounds, informed senior MHADA Mumbai board officials.