No pact, yet NMC releases Rs73cr to OCW under OTS

Nagpur: The Nagpur Municipal Corporation (NMC) has returned penalty and disbursed amount towards escalation cost, total around Rs73 crore, under One Time Settlement (OTS) scheme to private operator Orange City Water Private Limited (OCW) even before execution of mandatory revised agreement.
TOI had on January 31 reported that NMC has started disbursing the amount. As per data available from the NMC, around Rs73 crore has been disbursed in the last 10 months. Only Rs20 crore is pending to be released as paucity of funds halted the payment.
The NMC and OCW were supposed to execute revised agreement for implementation of OTS. The draft is ready and tabled before NMC’s special purpose vehicle Nagpur Environmental Services Limited (NESL) board of directors (BoD) for approval.
NMC standing committee chairman Vijay Zalke, who is chairman of NMC Water Works Consultative Committee and director in NESL, told TOI, “The draft is approved and will be cleared in the BoD soon. Pending amount will be disbursed after agreement,” he said.
Terming it a major irregularity, Congress corporator Sanjay Mahakalkar said, “Maha Vikas Aghadi (MVA) government and municipal commissioner Tukaram Mundhe should conduct an inquiry and take stringent action against officials concerned. Despite financial crisis, ruling party BJP approved OTS in a big favour to OCW. Original agreement too was meant to benefit OCW only,” he said.
NMC had engaged OCW on March 1, 2012 for execution of Rs387.86 crore 24X7 water supply project in five years and operation of city’s drinking water supply costing over Rs200 crore per annum for 25 years.
NMC failed to get 24X7 water supply project completed from OCW by March 1, 2019, leading to cost escalation of Rs52 crore. For violation of agreement and other reasons, the NMC deducted penalty of Rs41 crore from OCW’s payment between March 1, 2012 and March 31, 2018.
The OCW demanded disbursal of these two amounts which NMC couldn’t under the original agreement executed in 2011. Despite strong opposition, the NMC general body approved the OTS in March 2019.
Under OTS, the NMC extended deadline of 24X7 water supply project by 18 months and granted few more relaxations to OCW.
Despite passage of 16 months, the project is yet not complete. Against target of 3.20 lakh houses, less than 60,000 houses have been covered under 24X7 water supply.
Mahakalkar said, “Forget round-the-clock supply, I am yet to get water for one hour in my ward for the last six months. Also, issue of contaminated water supply is yet to be resolved in many parts of city,” he said.
OCW did not respond to TOI’s mail and messages.
NMC superintending engineer (water works) Shweta Banerjee also did not respond to TOI calls and messages.