Shimla water supply project row reaches World Bank

Subhash Rajta

Shimla, October 14

Shimla Municipal Corporation’s former Mayor Sanjay Chauhan and Deputy Mayor Tikender Panwar have approached World Bank’s Country Head for India, alleging irregularities in the implementation of the Shimla Water Supply and Sewerage Services project. In a letter to the World Bank official, the former MC officials have urged him to intervene and cancel the recent award of tender for the continuous high pressure water supply in the city.

Includes operation, Maintenance cost

The tender floated on July 27 was only for capital expenditure to be incurred on the project, but the tender awarded to Suez India for Rs 683 crore also included operation and maintenance cost of the project for 15 years. — Pankaj Lalit, SJPNL Managing Director

Challenging the award of tender to Suez India for Rs 683 crore, the former MC officials alleged that the lowest bid, including Capex (capital expenditure) and operation and maintenance costs was nearly 33 per cent higher than the department’s estimate of the project value.

The two alleged that estimated value of the project, excluding operation and maintenance, was Rs 442 crore in a tender published by the SJPNL on July 27, 2022, but the project cost would balloon up to around Rs 786 crore after the quoted cost.

SJPNL MD Pankaj Lalit, however, refuted their claims saying that the tender process has been done in a fair and transparent manner. “The tender floated on July 27 was only for capital expenditure to be incurred on the project, but the tender awarded to Suez India for Rs 683 crore also included operation and maintenance cost of the project for 15 years,” said Lalit, explaining the gap in the estimated and quoted cost.

The complainants, however, claim that the SJPNL’s overall estimate including capital expenditure and operation and maintenance was Rs 592 crore, but the eventual cost would exceed it by around Rs 200 crore, which would be a straight loss to the exchequer.

In another alleged irregularity, the complainants said that that since the tender for the project was floated the first time, it should have been floated again as per the law as only two bids had been received. SJPNL MD, however, asserted that the tender was floated for the fourth time and hence they were not obliged to float it again.

“The tender for the project was first floated in 2019, second time in 2020 and third time in 2022. For some reasons, the process could not be completed in earlier occasions. So this was the fourth time and we awarded it to the lowest bidder,” said Lalit.