Cost disputes may delay renovaion work of Mantralaya in Maharashtra

MUMBAI: The renovation of Mantralaya, Maharashtra government’s seat of power, which got damaged in a devastating fire that broke out in June this year, may get delayed because of a valuation dispute between the Public Works Department (PWD) and construction companies bidding for the project, said people familiar with the development.

While PWD had estimated a cost of around Rs 110 crore for the repairs, contractors claim the figure should be higher since the tax component must be added to the estimated cost.

Construction companies claim PWD, while calculating the cost, had not taken into account taxes of approximately Rs 30 crore which includes CST, octroi, excise, VAT, labour and PF.

A high-level committee headed by state chief secretary Jayant Kumar Banthia on Thursday urged all three bidders — Unity Infraprojects, Shapoorji Palloonji and L&T — to revisit their rates and come up with more acceptable quotations.

"While negotiating with the committee, bidders are sticking to their claims and have pointed out that government’s estimate of Rs 110 crore has not factored in the tax component of around Rs 30 crore. Other factors like shorter duration of the project with a stringent penalty clause, deployment of a 1,000-strong labour force, restricted work hours adhering to Mantralaya timings and severe space constraints for the use of heavy machinery have only added to the cost, besides the tax factor," said a spokesperson representing one of the bidders.

Unity Infra, L&T, Shapoorji Pallonji have quoted bids which are at least 50% more than what was estimated by the public works department. The lowest bidder, Unity Infra, has quoted 48% above the project cost estimate . The other two companies have also quoted higher bids.

The project involves restoring and renovating all six floors starting from the ground floor of the main building covering an area of around 5 lakh sq ft as per the floor plans submitted by the government-appointed architect, Raja Adheri.