Deonar fire: BMC’s counter-claim from contractor: over over Rs 1,000 crore

The Deonar fire had raged for months

COUNTERING CLAIMS of compensation of Rs 250 crore made by Tatva Global Environment — the contractor appointed for the scientific closure of Deonar dumping ground — the Brihanmumbai Municipal Corporation (BMC) is planning to make a demand of its own amounting to more than Rs 1,000 crore. Barring the cost of dousing the fire that broke out at the ground last year, the BMC will demand a compensation of over Rs 700 crore for the loss of income caused by the Bombay High Court’s ban on new constructions.

Soon after the massive fire that started in the last week of January 2016, and continued for a couple of months, the Tatva Global Environment had handed the plot over to the BMC on January 31 and the civic body had terminated the contract with the agency. The contractor moved the HC and demanded a compensation of around Rs 250 crore, which included dues of Rs 35.91 crore. As part of its argument against the BMC, Tatva Global had said that the termination was illegal since the tender supposedly stated that “an additional period of six months from the early termination of the term shall be provided”.

Civic officials blamed the contractor for the fire since it had failed to set up a waste treatment plant. Vijay Singhal, Additional Municipal Commissioner, said this was the first instance where the BMC would make a counter claim in a case where contractors have sought a compensation. “We have suffered more than they have and the fire has caused financial loss to people and the housing industry. The contractor cannot simply put the blame on the BMC, especially since this fire was caused by their negligence,” he said.

Officials from the legal department said the court had now appointed an arbitrator in the case. Stressing on the importance of proper processing of solid waste, Municipal Commissioner Ajoy Mehta said, “The city has lost time in implementing scientific disposal of garbage and has paid an environmental cost. We are not willing to pay them any compensation and will aggressively pursue our argument.”

Other officials from the solid waste management department pointed out that the fire at the Deonar dumping ground had become a national issue after the NASA had issued satellite images of the fire. “We were dumping more than 2,000 metric tonnes of waste at Deonar every day. The contractor, however, failed to set up the waste processing plant as mentioned in the tender condition and we asked for a refund amounting to Rs 250 crore. We are still working out the final details,” said an official, adding that a total claim of around Rs 1,020 crore would be submitted to the arbitrator by the end of this month.

He added that the fire went on for almost three months and the fire brigade incurred a cost of around Rs 70 crore for fire-fighting equipment as well as deploying security personnel. The SWM department officials also quoted an amount of more than Rs 700 crore as compensation for the drop in the BMC’s income from building permissions from real estate projects in 2016-17, which were halted due to the HC ban on new constructions for failing to comply with Municipal Solid Waste (Management and Handling) rules.

The High Court has refused to lift the ban until the civic body and the state government solves the problem of dumping waste at landfill sites. Since then, the BMC has taken up extensive measures to decentralise waste processing by making segregation of solid waste mandatory for commercial and residential properties producing more than 100 kg of waste every day.