CHENNAI: Days after questions were raised about the Rs 82.87 crore contract for constructing a Fintech City being awarded to Namakkal-based PST Engineering Construction (PSTEC), which drew flak for constructing poor quality apartments at K P Park in Chennai, senior officials said the firm has not been ‘blacklisted’ from taking part in government tenders due to a stay order of the Madras High Court. Chief Minister M K Stalin laid the foundation for building the Fintech City and a Fintech Tower on Saturday.
Official sources said the Tamil Nadu Urban Habitat Development Board (TNUHDB) had initiated the process to blacklist PSTEC but it could not be completed because of the HC order. While steps have not been initiated to vacate the stay, officials said PSTEC was being awarded contracts by various departments even after 2021, when the issue arose, including six-laning of Tuticorin Port Road Section of NH-7A (new NH-138) at a cost of Rs 130.20 crore by the National Highways Authority on India on March 31, 2023.
Officials said the decision to award the contract was taken as there was a difference of Rs 17 crore between PSTEC and the next bidder. “As per legal opinion, the developer was not blacklisted and he can be allowed to participate in the tender,” offical sources said.
‘CUBE investigation has highlighted lapses, but DVAC took no action’
“Also, the tender is not for constructing a building but for roads, storm water drains, pumping station, waste water network and external security system. We did everything legally,” sources said. “This bidder was found eligible in technical evaluation along with two other bidders,” said a press release issued by TIDCO, which is implementing the Fintech City project, on Tuesday.
Details about the other two bidders, however, were not provided. Interestingly, official said the process of fixing accountability for lapses in the construction of 864 EWS tenements (stilt+9 floors) at KP Park will be followed up by TNUHDB and if any lapses are proved, penal action will be taken against the firm as per Transparency in Tenders Act and bidding condition.
The Centre for Urbanization, Buildings & Environment (CUBE), a joint Initiative of IITMadras and Tamil Nadu government, which assessed the construction quality of KP Park tenements at Pulianthope in Chennai, had found several shortcomings in construction quality, workmanship, plastering, and other defects. About 864 houses, each 400 sqft in area, were built between January 2018 and May 2019 by KP Park at a cost of Rs 112.60 crore.
While the market rate of construction cost was Rs 1,800 per sqft, TNUHDB had paid Rs 12,602 per sqft, showed an RTI reply. After multiple complaints were raised about the construction quality, a probe was initiated. On October 5, 2021, CUBE submitted a report saying that only 5% of samples collected from the site had the right sand-cement mix ratio.
“The investigation by CUBE has already highlighted the lapses. All that Directorate of Vigilance and Anti-Corruption had to do was to file a criminal case, which it has not done. The government defending the contract given to PSTEC is unacceptable. We will have to move court to file an FIR in the case,” Jayaram Venkatesan, convener of Arappor Iyakkam, said. HR&CE minister PK Sekarbabu had on October 2021 said the government had decided not to award any new projects to PSTEC. “But now the government is citing some rules to state that a bidder can be disqualified only if the firm is blacklisted,” activists said.
The Fintech City project relates to infrastructure and site development of phase-I of Fintech City on over 56.48 acres. “After reviewing the bids, the work was awarded to PST Engineering Construction at Rs 82.87 crore including GST which is 16.34% less than the department estimate prepared by TIDCO. The e-tender for construction of Fintech Tower, a high-rise building with a builtup space of 5.6 lakh square feet was awarded to URC Construction Private Ltd, Bangalore, for Rs 151.55 crore including GST which was 11.64% less than the department’s estimate as on June 13, 2023,” the release said.
“Fair participation is exemplified by the fact that both the tenders have attracted quotes lower than the estimates, thus resulting in saving Rs 36.15 crore for TIDCO,” the release said.
‘Only 5% samples had right sand-cement mix’
About 864 houses were built in 2019 at K P Park at a cost of Rs 112.60 crore. After multiple complaints about building quality, a probe was initiated. In 2021, a CUBE report said only 5% samples had correct sand-cement mix ratio
PSTEC bid lower by Rs 17cr, say officials
“PSTEC was awarded tender as there was a difference of Rs 17 crore between it and next bidder. It was not blacklisted and can participate in tender,” official sources said