Despite CM directive, BMC awards contract to downgraded firm

Despite Chief Minister's directive to BMC not to award contracts to companies that have been downgraded, the civic body has awarded a Rs 260-crore road project to RPS Infraprojects. The firm was downgraded from AA to A by BMC's building proposal department in January 2011 for poor construction in a civic school. Such a downgrade (from AA to A) restricts the firm from bidding for projects over Rs 7 crore for two years.

RPS Infraprojects (formerly RP Shah) had submitted the lowest bid for a basket of projects estimated to cost Rs 260 crore. It bid for the projects with Prakash Engineering and Supreme Infra in December 2012 based on its licence with the Public Works Department (PWD). The same month, the CM directed BMC to change its registration rules so that companies demoted by BMC are barred from using their registration with other government agencies to take advantage.

Just before this directive, RPS Infraprojects was alloted road projects worth Rs 112 crore in the western suburbs. During the period the firm remained downgraded by the BMC's building proposal department, it bagged contracts worth more than Rs 760 crore across crucial departments such as hydraulic, storm water drains, sewerage, bridges and roads.

The CM's missive, however, prompted BMC to stall the award of the Rs 260-crore tender to RPS Infraprojects. The civic body sought legal opinion and the two-year restriction period for the firm coincidentally ended in January 2013, paving the way for the award of the project.

Aseem Gupta, additional municipal commissioner, said, "We have taken a call to allot the road contracts to the contractor since he was demoted for two years that ended in January this year, following which he can be given contracts."

In 2011, RPS Infraprojects was served a show-cause notice for hiding information while bidding for road projects. Although it had been downgraded from AA to A for works in all BMC departments, the civic body upgraded the firm to AA in all other departments barring building proposal.

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