Incorrigible BMP pays Rs 29 crore more for road projects

Incorrigible BMP pays Rs 29 crore more for road projects
New Indian Express

BANGALORE: Even as there is widespread criticism about waste of funds, the Bangalore Mahanagara Palike (BMP) continues to find various ways of spending more on a project than is warranted.

This is especially apparent from the BMP’s record on the World Bank-assisted road works under the Karnataka Municipal Reforms Project (KMRP).

The four packages, comprising 40 roads measuring 130 kms, have cost the civic body Rs 177.72 crore in contracted amount as against the estimated cost of Rs 148.5 crore - a cost overrun of a whopping Rs 29.22 crore.

Low levels of competition are the cause as only 2-5 contractors have participated in the tender bidding process and most of them have contested for all the packages.

This has forced the BMP to award work on three packages to a single contractor -- KNR Constructions -- while only one has gone to another contractor, R N Shetty.

The Rs 28.6 crore KMRP 1 package had three competitors – KNR constructions, ECI Engineers and Nagarjuna Constructions -- who bid at a premium of 19.72 percent, 43.25 percent and 23.23 percent respectively.

Finally the work was awarded to KNR at Rs 31.49 crore. The Rs 42-crore KMRP 2 package had just two competitors; KNR constructions and Ketan Constructions, at a premium of 25.48 percent and 17.29 percent respectively.

The work was awarded to KNR at Rs 52.51 crore.

The Rs 19.24 crore KMRP 3 package had five participants: Ketan Constructions, KNR, SRC, Vishal Infrastructure and SRK Construction at a premium of 26.04 percent, 23.18 percent, 45.17 percent, 19.31 percent and 14.57 per cent respectively. Again, KNR was awarded the works at Rs 24.99 crore.

The Rs 39.6 crore KMRP 4 package had four contestants: R N Shetty, Reddy Veeranna, Ketan and SRC Projects at a premium of 8.02 percent, 24.54 percent, 36.24 percent and 44.59 percent respectively.

R N Shetty was awarded the works at Rs 47.76 crore. Interestingly, R N Shetty is a Karnataka based contractor who has bid at just 8 percent premium while KNR is Hyderabad based contractor who has bid at 20 - 25 percent.

The BMP Council last month had vociferous objections to most contracts going to a single bidder. Former mayor P R Ramesh told this website’s newspaper that the KMRP packages were never discussed on the floor of the House.

“The Council needs to know the facts before taking decisions as the BMP cannot afford to waste public money,” he said.

But the BMP officials defend the move.

“All the decisions were taken according to World Bank guidelines and the nodal agency Karnataka Urban Infrastructure Development and Finance Corporation (KUIDFC) has not objected to them,” said an official.