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Calcutta, March 5: The Left Front government undertook two rounds of bidding, not one, to build the VIP Road flyover but junked both in its obsession to drive down costs and settled for Mackintosh Burn, fresh revelations suggest.
So single-minded was the stress on cutting costs that the company which bid the lowest in the fresh round felt compelled to withdraw from the project, according to an official of a firm that participated in the process.
The official did not want to be named as he was commenting on a company he was not associated with.
So far, it was thought that only one round of bidding took place. But the new accounts suggest the government made a fresh attempt with the objective of saving as little as Rs 3 crore. But the attempt backfired.
In response to the first round, Tantia Construction had quoted the lowest figure of Rs 68 crore in 2007. Tantia officials were not available for comment or confirmation.
But an internal assessment of the Calcutta Metropolitan Development Authority, which reports to the urban development ministry, had pegged the project cost at Rs 65 crore.
The CMDA insisted that the benchmark should be adhered to, following which the government cancelled the round. Three months later, it launched another round.
“The second round also had to be cancelled as Gammon India emerged the L1 (lowest bidder) by quoting Rs 90 crore whereas we wanted the flyover to be built at Rs 65 crore,” recounted a CMDA official.
The accuracy of the bid amount could not be verified — some said it was between Rs 80 crore and Rs 100 crore — because most officials associated with the process either refused to comment or cited inability to recall exact figures.
At Rs 90 crore, the lowest bid amount had risen by Rs 22 crore partly because of global factors — something the decision-makers in Bengal appeared to have overlooked in their eagerness to save Rs 3 crore.
Steel and cement prices were on fire between 2005 and 2007, fuelled by a voracious Chinese appetite ahead of the 2008 Beijing Olympics. But the prices crashed after the collapse of Lehman Brothers, which signalled the global downturn.
Another factor that pushed up the cost was the “difficult design” arising from the curvature on the flyover, said the official of the company that took part in the tender process.
Gammon executives were not available for comment but the official of the other company that was interested in the flyover project gave a detailed account.
“The estimate was made on the basis of design, which was difficult because of the sharp curvature involved. Gammon had quoted a price accordingly but the CMDA felt it was too high,” the official said.
According to an engineer, a flyover with a sharp curve requires more piers than a straight flyover and, as a consequence, costs more.
“The piers should be closer at the curves. The distance between two piers can be much more in a straight flyover. So a curved flyover costs more,” said the engineer. “If the number of piers is not adequate, the safety of the flyover can be compromised,” he added.
The curved portion of the flyover that collapsed on Sunday did not have a pier for as much as 40 metres.
After Gammon emerged the winner, the CMDA told the construction firm of funds constraints and wanted it to scale down costs. “Prolonged negotiations followed between the CMDA and Gammon,” said the official of the other company.
Gammon, according to this official, decided to withdraw from the project following an internal assessment that the CMDA wanted the job done at an impossible price. “The company decided that it wouldn’t be able to construct the bridge with a sharp curve at a much lower price,” the official said.
With the second round of bidding deepening the government’s cost dilemma, the only option was to fall back on a company that could be cajoled and coaxed into falling in line.
Officials zeroed in on Mackintosh Burn, which had successfully completed the Siliguri railway station feeder road flyover around that time. Burn wanted Rs 75 crore. By then, the CMDA officials had veered round to Rs 68 crore, the price discovered through the first round and quoted by Tantia Construction six months ago.
The deal with Burn was eventually sealed at Rs 68 crore with a clause to cover most of the escalation if material prices rose. This meant the objective behind cancelling the first round — save Rs 3 crore — could not be met.
“An L1 (lowest) bid that is just Rs 3 crore more than the internal assessment is too small an amount for a project with a cost of around Rs 65 crore. The government should not have gone for the second round on the cost issue,” said an official.
CMDA sources said the decision-makers were not unaware of the global trends. A government order had said contractors in ongoing projects would be offered compensation in view of the rising steel and cement prices.
“We had cited this order while asking the government to bear 90 per cent of the escalation cost…. But the amount has not reached our coffers even now,” said a Burn official.
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