MUMBAI: Messing around with an infrastructure contract worth Rs 2.26 crore way back in 1998 forced the Maharashtra government to fork out a whopping Rs 540 crore as compensation to the contractor last month.
It all began with the state government’s Public Works Department (PWD) commissioning the construction of chain road bridges in Chandrapur district to M/s Khare and Tarkunde Infrastructure Pvt Ltd on a build, operate and transfer (BOT) basis in November 1998.
The firm executed the work within two years and started collecting revenue from toll booths. But in 2003, the PWD shut the toll booths down unilaterally and took them into its custody. For how long the contractor had the right to run the toll booths was not clear at the time of filing the report.
But the matter went into adjudication with the government appointing retired chief PWD engineer R H Tadvi as arbitrator. In March 2004, Tadvi ordered the government to pay Rs 5.71 crore as compensation plus 25% per month compound interest to the contractor.
Instead of paying up, the government went to the district court, which upheld the arbitrator’s decision but reduced the compound interest to 18% per year. When the government filed an appeal in the Bombay High Court in 2021, it directed payment of Rs 240.52 crore to the firm in three months.
M/s Khare found the sum meagre and filed an appeal in the Supreme Court, which got the amount revalued, and directed the government to pay Rs 540 crore. The amount has since been paid. This daily has a copy of the government resolutions on the matter.
There is no closure yet to the matter as the cabinet decided to set up a probe panel to check the terms and conditions of the contract. It also decided to file a curative petition in the SC. In other words, it will burn more taxpayers’ money.