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> Mumbai Trans-Harbour project gets more curious |
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Mumbai Trans-Harbour project gets more curious
posted by
Vivek Sharma
17 May 2008, 15:19
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labels: government, infrastructure, companies
The ambitious Rs6,000 crore Mumbai Trans-Harbour Link project is now bound to attract even more controversy. The project was awarded to a consortium led by Anil Ambani-controlled Reliance Energy, now Reliance Infrastructure, in a rather curious bidding process.
Despite the obvious attractiveness and the visibility of the project, all other bidders – including some of the biggest names in infrastructure construction – backed out and the bidding became a straight contest between the Ambani brothers. The Reliance Infrastructure consortium quoted a concession period of one month short of ten years, including the construction period. Sea King Infrastructure, a private company said to be controlled by Mukesh Ambani and his lieutenant Anand Jain, quoted 75 years. The huge difference in the quotes for concession periods was never explained and Anil Ambani won the bid.
Newspaper reports now suggest that the Maharashtra government is now ‘concerned’ about the very low concession period quoted by Reliance Infra. It turns out that, the government agencies had internally calculated a concession period of 44 years for the project to be viable.
The first question is, why should the state government be ‘concerned’ about a quote being too low as long as the winner of the biding process meets all other requirements – including the financial requirements? As long as Reliance Infra is willing to execute the project as per the specifications and ready to meet all the financial obligations, the government has no reason to worry.
Secondly, did this ‘concern’ arise all by itself within the corridors of Mantralaya or was the government ‘encouraged’ to build up some concern? Is it that the bid winner made some miscalculations about expected traffic volumes and is now trying to get a better deal? While making such a low quote, Reliance Infra was obviously banking on increased traffic from the numerous SEZ projects that have been proposed in the area.
Now that it has become obvious that many of these projects will be delayed because of problems in land acquisitions, the concession period quoted by Reliance Infra appears way too optimistic. Expect this to get even more curious in the days to come!
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