Rs100 crore repair scam: Contractors get MHADA help

Maharashtra Housing and Area Development Authority (MHADA) officials and private contractors are hand-in-glove in a Rs100-crore scam concerning repairing tenders of cessed buildings, a Right to Information Act (RTI) query has revealed. Contractors try to grab the tenders by quoting prices as less as 80% to 90% below the estimated cost of repair.

However, once they get the contract, they recover the deficit — difference between the estimated repair cost and the price they have quoted — by submitting an ‘extras’ bill. They also include their profit in the bills. DNA is in possession of 68 documents which highlight the modus operandi of contractors and Mhada officials. 

For example, if a contractor quotes Rs1 lakh to repair a building against its estimated cost of Rs10 lakh, he later submits bills over and above Rs9 lakh to recover the amount with the help of Mhada officials. He may or may not complete the repair work, but ensures he gets a hefty sum with some profit for Mhada officials too.

Mhada repaired a cessed building in Bhuleshwar for which the architect and engineer estimated the repairing cost to be Rs4.98 lakh. A private contractor bagged the tender by quoting Rs94,732 — 81% below the estimated repair cost. In another case, a contractor was allotted the contract after he quoted a price 90% less than the estimated cost. The lowest bidder always bags the contract.

“The contractors later recover the deficit amount and earn profit by submitting the ‘extras’ bill to Mhada. The bills are cleared by Mhada officials as their palms are greased by contractors too,” alleged Salim Shaikh, social activist and vice-president of NGO Together For Empowerment & Active Monitoring which got the documents under RTI.

Mhada deputy chief engineer (repairing cell) Arvind Dhole refused to comment. However, state housing minister Sachin Ahir said if the contract is allotted at a price 80% to 90% less than the estimated cost, it is gross violation. “In such cases, Mhada must float the tenders again. I will take note of this and ensure appropriate action is taken,” he said.

The 68 documents in possession of DNA show that almost all work is given to the bidder who quotes an amount far lesser than the estimated repair cost. “If the estimated cost is Rs10 lakh, the contractor says the work will be done in Rs1 lakh. How is it possible? It is because of extras,” said Shaikh.

“Even the genuine contractor who misses out on the contract does not raise an objection because there is a cartel. If contractor ‘A’ gets work this time, next time contractor ‘B’ is accommodated. It is their modus operandi,” said activist Tabrez Patel.

Apart from the ‘extras’ bills, contractors also unofficially force tenants to shell out money. “No one bothers to give them a receipt. It is a racket which runs into Rs100 crore. If there is shortage of funds, money is diverted from the MLA and MP fund. So, the amount is distributed among contractors, elected representatives and Mhada officials. Many dilapidated buildings are repaired only on paper. That is the reason for frequent building collapses in the city,” said RTI activist Anil Galgali.

“We have no option, but to keep paying MHADA officials and elected representatives. We should not be the only people blamed for bad work. There is corruption at every level of the administration,” a contractor said on condition of anonymity.