Delay doubles Mumbai terminal upgrade cost

The Airports Authority of India (AAI) board will meet on Monday to ratify a proposal to once again hike the cost of upgrading Terminal 1B of the Mumbai airport as well as to approve the new time schedule for completion.

The cost is likely to double from the original approved cost and the delay in completion will be around a year.

In April last year, the AAI had internally estimated the cost of upgrading the terminal to be Rs 46 crore and then invited bids. The lowest bid, by Unity Info Projects was Rs 72 crore, but since this was much higher than the internal estimate, several rounds of negotiations were carried out with Unity, and in November, a contract was signed for Rs 63.5 crore. At that time, the upgrading was to be completed by March 2005.

In January this year, the board met to approve a cost escalation to Rs 86 crore. The latest estimate for the project, which now has to be approved, is Rs 123 crore and the estimated date of completion is now March 2006.

According to AAI sources, Hafeez Contractor,. who is the consultant with Unity, keeps coming up with new designs and modifications. Unity, in turn, passes on the higher costs on to the AAI board for approval.

Aviation ministry officials said while Contractor had some very useful suggestions "" one was to have a huge canopy to allow cars to come into the terminal without the passengers getting wet "" these had to stop at some point. Interestingly, the AAI board can sanction expenditure of only up to Rs 150 crore on their own without going to the ministry or the PIB. Therefore, any more increase means the matter will be out of the board's hand.

Hafeez Contractor, while maintaining that he couldn't comment on the reason for the time overruns, said the work was a lot more than what was originally envisaged. "The cost of the new terminal has gone up because of three reasons "" repairs, retrofitting and inclusion of new areas. When we opened the old building, we found that it was in a worse state than we expected. Almost all the pillars in the lounge had to be strengthened and the facade is totally new. In certain areas, we have decided to give more space "" luggage handling, for instance. The concourse is now twice the size it was "" 60,000 square feet. Many of these areas were added up after we started work. That is why the cost shot up," he said.

Officials, however, said all the additions in terms of space have been done at Unity/Contractor's instance and nowhere did the AAI ask for this to be done.