Mumbai’s coastal road project to be costlier by Rs 339.32 cr

15 Jun 2023 CW Team

The ambitious coastal road project has faced numerous challenges throughout its construction. However, the latest hurdle is particularly significant, with a cost increase of Rs 339.32 crore. This substantial amount is being demanded by the companies involved in the project, citing changes in GST rates since the commencement of work. As a result, the overall cost of the coastal road has now risen from Rs 12,721 crore to Rs 13,060 crore.

In order to maintain the project's progress, the BMC (Brihanmumbai Municipal Corporation) will be required to allocate the aforementioned amount, which includes an additional sum of Rs 6.94 crore. The companies have requested extra funds to relocate a water pipeline that obstructs the project's path.

Initially, the shifting of the pipeline was not included in the original contract and scope of work. However, given the project's advanced stage, this task has become unavoidable. The BMC's hydraulic department has already granted approval for the relocation of the 900mm diameter water line. Interestingly, a comprehensive survey of utility services was conducted prior to commencing the coastal road construction, but this particular issue did not arise at that time.

Under the revised cost proposal, a 12 percent GST rate was applied when the project commenced in 2018. However, the tax rate increased to 18 percent in 2022. Consequently, the three companies involved in the project will be responsible for paying an additional six percent GST.

The construction of the coastal road stretch from Priyadarshini Park to Baroda Palace is being undertaken by L&T company. Similarly, HCC and HDC firms are responsible for building the section from Baroda Palace to the Bandra-Worli Sea Link, while L&T is in charge of constructing the final stretch.

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