ALERT: AMC Proposes ₹60 Crore Road Contract at 32% Premium, Single Bidder Favoured

The Ahmedabad Municipal Corporation (AMC) is set to review a controversial road infrastructure proposal that has raised significant concerns regarding fiscal transparency. The project, valued at ₹60 crore for road construction and repairs in the South-West Zone, is currently being pushed for approval despite being priced 32% higher than the AMC’s own initial cost estimates.

Single-Bidder Controversy

Despite this being the second call for tenders for the project, only one agency, Vimal Infracon LLP, submitted a bid. Under standard municipal procurement guidelines, the failure to attract multiple bidders usually necessitates a third round of tendering to ensure competitive pricing and transparency. However, the current proposal is slated for approval at the upcoming Road and Building Committee meeting on 17 July without further competitive efforts.

Financial Implications

The project's cost, which is 32 per cent above the original engineering estimate, is further complicated by a "bitumen price adjustment" clause. This provision allows for additional payments to the contractor based on fluctuations in market rates and GST. Financial analysts warn that this could result in an additional burden of ₹15 to 20 crore on the municipal exchequer once the project is completed, significantly exceeding the base contract value.

Timing and Execution

The urgency to finalise the contract in the middle of the monsoon season has also been noted. Since road resurfacing and construction are not feasible during heavy rainfall, the timing of the approval—well before work can commence after the monsoon—has prompted questions from observers regarding the haste of the decision-making process.

The Road and Building Committee is scheduled to deliberate on this proposal on 17 July, where officials will be expected to address the concerns surrounding the inflated costs and the lack of competitive bidding.