Gammon may lose Rs 338 crore MP bid

Reports have surfaced that the Madhya Pradesh government is likely to cancel the single bid offer of Rs 338 crore of Gammon India for a re-densification project of the capital town, Bhopal. Re-densification means bringing down old structures to build new ones.

The company, which had outsmarted 17 big companies like L&T, Reliance and DLF, has not been given any intimation even after it technically qualified for the project.

The documents in terms and conditions say the company should be awarded work within two days of the announcement of its qualification for the project. The company had been qualified on December 12.

"The state Cabinet will cancel the bid on grounds for it being the sole bidder for the project," insiders of the state government told Business Standard.

The company has qualified for the project that envisaged the development of an area of 15 acres in the prime business locality of New Market in Bhopal on a public-private basis.

The Madhya Pradesh Housing Board, the nodal agency for the project, has said the state Cabinet will decide about the project.

Speaking to Business Standard, Housing Board Managing Director RK Swain said, "The empowered committee on redensification project has forwarded the issue to the state Cabinet and only the Cabinet can decide about it."

Meanwhile, a well-placed source in Gammon India has said it had only been informed about the technical qualification for the project. "Gammon quoted Rs 338 crore for the project against the reserve floor price of Rs 225 crore," a source said.

The consultant on the project, IDFC (Infrastructure Development Finance Corporation), has also said the state Cabinet had all rights on the projects. "It is the state government that will see how development takes place in the state," Suresh Kumar, CEO IDFC, said.

But none has the answer as to why the state Cabinet wanted to cancel the project after opening the bid of the company. "The state government wants to allocate the projects to various local builders," a government source said.