SC pulls up Mumbai civic body for tender process abuse, warns of coercive action

The Supreme Court on Tuesday took serious note of the “pattern” of the Municipal Corporation of Greater Mumbai of issuing a tender, then cancelling it and again reissuing it leading to cost escalation and delay in completion of projects.

The top court directed the municipal commissioner of MCGM to remain present on the next date of hearing and put to notice all concerned authorities of coercive action against them.

A bench of Justices DY Chandrachud, Surya Kant, and Vikram Nath was hearing a batch of pleas related to sewage treatment plants in Mumbai under the sewage disposal project which included the upgradation of seven STPs at Worli, Bandra, Dharavi, Versova, Mandup, Malad and Ghatkopar. 

”The manner in which the MCGM has proceeded prima facie indicates the disregard of the directions which were issued by this court on May 17, 2019. The process of issuing, cancelling, and reissuing the tenders results in enhancement of the project cost, which is evident from what is stated before this court,” the bench said.

It added that equally, the delay results in a situation where until date no decision has been taken on the tenders which have been floated and there is absolutely no material before this court to indicate that the work would be completed with the seriousness which it deserves. 

”Surely, the MCGM cannot leave the faith of the wellbeing and welfare of the residents of the city of Mumbai to its inaction and lethargy,” the bench said.

The top court noted that it had on May 17, 2019, directed the MCGM to follow the parameters which have been laid down by the expert committee (constituted by the NGT) in its report, in processing the tenders and the directions of the Ministry of Environment and Forests in this regard.

The bench noted that after the interim order of this court dated May 17, 2019, it took almost four months for MCGM to issue tenders on September 6, 2019, which were cancelled in January 2020, and fresh tenders except for Dharavi STP were issued on April 30, 2020. 

It said that subsequently, in the first week of August 2020, all the six STP tenders were cancelled, and on August 31, 2020, tenders for seven STP were re-invited and the capacity of Dharavi STP was increased. 

The top court said that the present status of the tenders is stated to be that the bids for the technical and financial packets were opened and are again being scrutinised by peer review committees.

The bench said that the written note submitted on behalf of MCGM indicates that due to the delay in setting up the STPs, the cost of tenders has increased from Rs 10,000 crore to Rs 18,500 crore. 

”There seems to be a pattern, which emerges from the material which has been placed before this court of tenders being issued, cancelled and reissued, resulting in an unfortunate delay,” it said, adding that the proposed timeline which has been indicated before the court in the written note, it is anticipated that the work for the STPs would be completed between March 31, 2025, and May 31, 2027. 

It said, ”The timeline which has been indicated takes the completion date well beyond the seven years, which was envisaged in the report of the expert committee. We are categorically of the view that MCGM have not shown any commitment towards completion of the project at an early date and seem to be oblivious of the fact that the delay on its part is resulting in tremendous escalation of the costs. MCGM is entrusted with public revenues and we expect that this situation will be remedied at the earliest.”

The bench directed the Municipal commissioner of MCGM to hold a meeting immediately and to review the status of the tenders, the steps which are being taken in pursuance with the peer review, which is stated to be underway, assess the timeline for the award of contracts and specify the enforceable timeframe for the completion of the work along with assigning specific responsibilities for completion of the work.

It said, ”Unless a comprehensive affidavit is filed before this court along the above lines after taking concrete decisions, the court will be constrained to recourse to its coercive processes on which we place all concerned in the MCGM to notice.”

The top court said that the affidavit be filed within two weeks from today indicating the decisions which have been taken. 

”On the next date of listing, we direct the municipal commissioner to be present personally before this court on the video conferencing platform, if necessary to answer the query of the court and be answerable to such directions as may be issued on that day,” the bench said.

At the outset, the bench noted that initially, the proceedings started before the National Green Tribunal arising out of the challenge to a notification dated October 13, 2017, which was issued by the MoEF for providing standards for effluent discharge. 

The NGT had constituted an expert committee on December 21, 2018, and stayed the notification dated October 13, 2017, which has diluted the standards for effluent discharge. 

The NGT accepted the report of the expert committee with certain modifications like the standards recommended for mega and metropolitan cities would also apply to the rest of the country and would apply not only to new STPs but for STPs which existed or were under construction.

However, the timeline of seven years which was suggested by the expert committee was disapproved.