Deccan Chronicle 19.01.2010

BBMP asked to cough up Rs 30 crore

Jan. 18: Cash-strapped BBMP is all set to become poorer by Rs 30 crore as a legal dispute with one of its contractors, Atlanta Infrastructure Limited, has gone against it.

The dispute relates to a project of the erstwhile BMP to upgrade 21 roads stretching over 71 km in south Bengaluru and the ring road by raising funds through municipal bonds. The work was executed between 1998 and 2000 by Atlanta Infrastructure, which bagged the contract to upgrade the roads to national standards in this part of the city.

But BMP later alleged that the company failed to complete the work within the deadline given causing much inconvenience to the public.

Atlanta, on the other hand, attributed the delay to release of funds for the project by BMP and said it could have done the work much faster if money was put at its disposal sooner. An arbitrator was appointed by the high court to settle the dispute, after the BMP commissioner failed to resolve it amicably although he was given an opportunity to do so within 30 days by the court, say BBMP sources.

Atlanta Infrastructure Limited claimed a compensation of Rs 19.42 crore for losses in overheads and profits and Rs 6.47 crore for loss in productivity as its machinery and equipment had to lie idle while waiting for funds from BMP to upgrade the roads under the project.

After giving ample opportunity to both sides to present their case, the arbitrator ruled in favour of Atlanta, saddling BBMP with a huge amount to be paid as compensation to the company. BBMP was directed to pay the money with an interest of 6 per cent per annum. While BBMP has already paid the first installment of Rs 10 crore, it still has to pay the remaining Rs 20 crore in two more installments, according to former mayor P. R. Ramesh.

“Had BMP been a little careful, public money could have been saved and better work would have been done by the contractor. Its negligence has cost the civic agency heavily,” admit some BBMP sources.