Research on Demand | SN Global Infra Research

The Kolhapur Municipal Corporation (KMC) general body on Thursday approved the standing committee proposal to conduct joint survey of the works done under the Integrated Road Development Project (IRDP) by Ideal Road Builders Company within 30 days of approval from the state urban development department. The proposal also seeks to cancel the toll collection started by the company assuring payment of the actual cost incurred for the project, 50% of which will be funded through the state government's Suvarna Jayanthi Nagarotthan Mission. NCP corportor Rajesh Latkar, while reading the proposal, said, "A joint survey of the project should be done by a committee consisting of the Kolhapur Anti-toll Committee members, experts, representatives of the state government and IRB within 30 days of the approval by the state urban development department. After the survey, the proposal seeking grants from the state government will be sent." "If the state government refuses to grant any amount to repay the project cost, we will bring a fresh proposal to discuss the repayment options," Latkar added. During the four-hour long discussion, the KMC refused to take any financial responsibility of the actual project cost as was stated in the initial proposal drafted by the standing committee. The standing committee proposal was undersigned by state labour minister Hasan Mushrif and minister of state for home Satej Patil last Sunday, while assuring the IRB Company of recovering the project cost keeping in mind the cancellation of toll collection. Congress corporator Sharangdhar Deshmukh alleged, "The original agreement in 2008 held the developer company responsible for shifting the utility lines. However, changes were made in the agreement without consulting corporators to favour the company." The corporators maintained that the MSRDC is responsible for missing the aspect of monitoring the quality and progress of work started in 2009. According to the agreement, the KMC played a role of confirmatory of the project and the MSRDC was authorised to monitor the work. The MSRDC appointed Sovil, a consultancy agency, to monitor the work. Janasurajya Shakti Party corporator Jayant Patil said, "A survey found that 89% of the work was completed and the IRB was not entitled to start collection of toll. However, despite the incomplete project work, the MSRDC did not take any action. The MSRDC is solely responsible for the blunder and according to the agreement; it should pay the project cost and not the KMC." The corporators targeted the MSRDC as it was responsible for inviting and selecting the bids for designing, construction, operation and maintenance of the 49-km internal roads of the city on build-operate-transfer (BOT) basis. Also MSRDC had prescribed the technical and commercial terms and conditions, and invited bids for the project. Patil further alleged that the developer company had appointed the sub-contractors for the project which according to the agreement was not permitted. "The IRB and MSRDC had not control over the sub-contractors for execution of the project and therefore the quality of the work too was neglected. Also, the work which started in 2009 was supposed to be completed in 24 months; however, it took more than two years to complete the work. According to the agreement, the MSRDC is liable for repayment of the project cost to the IRB," added Patil. The corporators targeted the MSRDC as to avoid any financial burden on the KMC as according to the agreement if the MSRDC is involved in breaching of the agreement at any time of its appointment as the implementing authority, it is liable to pay the developer company by way of compensation, all the direct cost incurred by the company in one lump within 30 days. KMC municipal commissioner Vijayalakshmi Bidari told the house, "The IRB was entitled to start the toll collection only after completion of 95% of the work. However, the survey conducted by the KMC and the district collector clearly says that 89% work has been completed. The MSRDC gave the completion certificate based on the survey conducted by the four-member committee appointed by the state government, which surveyed just 7.5 Km of roads. Based on the completion certificate, the state government allowed the IRB to start toll collection." The IRB Company in an affidavit submitted in the Bombay High Court states that it incurred cost of INR 512 crore for the project. However, the KMC maintains that the IRB has not completed the works of INR 24.50 crore of the total INR 220 crore works. "According to the agreement, the KMC is not responsible for the project cost above the maximum limit of INR 220 crore. Even after the joint survey, the project cost if comes above the stipulated amount in the agreement, we are not responsible for paying the increased amount for the project. We are not even responsible for the project cost as the project has not been completed," she said. The general body meet did not take any decision on the financial liability of the project cost after the state government refused to take any decision over the issue. Bidari, while citing clause 37.3.1 of the concession agreement, said, "We will maintain that the KMC is not liable to the termination payment to the company as the faults has been arrived on the part of the company and the MSRDC." Despite repeated attempts, MSRDC minister Jaydutt Kshirsagar did not respond to calls or SMSes. The corporators while addressing the issue on the financial responsibility of the project cost maintained that at first phase we will go for the joint survey of the project and after taking the advice from the state government, the decision on the taking the financial responsibility is discussed. Source-On Request

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