mumbai

Updated: Sep 15, 2017 10:14 IST

In a major setback for the ambitious Mumbai Trans Harbour Link project (MTHL), the construction cost of the project is set to increase. Reason: Bidders have quoted more than the cost estimated by the Mumbai Metropolitan Region Development Authority (MMRDA). The MTHL will be a sea-link that will connect Mumbai with Navi Mumbai and is seen as an important project to decongest the city.

The construction of the link has been divided into three parts. The first two packages are sea-bridge components, while the third is construction of a road up to Chirle in Raigad district.

On Thursday, the MMRDA opened the financial bids of two of the packages. But bidders quoted 15% above the estimated cost for both packages.

According to the MMRDA, the estimated cost of the entire project (all three packages) is Rs17,750 crore. The MMRDA calculated the cost of just constructing the project to be Rs12,600 crore — this does not include the cost for other components of the project such as forest diversion costs and compensation for fishermen. Sources said with the new bids, construction cost (Rs12,600 crore) may go up by Rs2,000 crore. This is likely to push the entire cost of Rs17,750 crore cost up to Rs20,000 crore.

The sea bridge will be 16.5-km long, while the road will be 3.813-km long.

Construction giants Larsen & Toubro (L&T) with IHI Corporation Japan, and Tata Projects with Daewoo Korea are the front-runners to bag the two sea bridge portions. “Financial bids for the sea bridge packages (package 1 and 2) of MTHL were opened on Thursday. L&T with IHI Japan, and Tata Projects with Daewoo Korea are the lowest bidders. But both bid 15% higher than the estimated cost. Bids for the third package are likely to be opened on Friday,” UPS Madan, metropolitan commissioner, MMRDA, told HT.

However, the MMRDA plans to seek justification from the bidder and will also negotiate in concurrence with Japan International Cooperation Agency (JICA), which is funding 85% of the project cost, before awarding the work order, Madan said. Sources said had the bids been more than 20-25% higher than its estimation, the nodal agency would have scrapped the bids and gone for re-bidding.

The 22-km long MTHL will provide easier connectivity between Mumbai and Navi Mumbai, and will also connect the proposed International Airport in Navi Mumbai.

The project has been on the drawing boards since 1980s and several attempts by state government agencies have failed to make the project a reality. When it was first mooted in the mid-1980s, its estimated cost was Rs350 crore.