Guindy Industrial Estate upgradation project delayed

Special purpose vehicle finds the final bid offer too high

The Rs 12.5-crore public-private partnership project to upgrade infrastructure in Guindy Industrial Estate, Chennai, has been delayed as the special purpose vehicle, Guindy Industrial Estate Infrastructure Upgradation Company, has decided to retender the contract. The SPV has found the final bid offer higher than expectations.

The project was scheduled to take off by the end of February or in early March.

With assembly elections round the corner in the state, the retender process is not likely to happen immediately.

However, the Tamil Nadu Road Development Company Ltd (TNRDC), consultants and nodal agency for this project, and directors of the SPV are in the process of getting the permission from the Election Commission for conducting the retender indicating that the process should not be seen as a violation of the model of code of conduct.

K Gopalakrishnan, president of the Industrial Estate Manufacturers' Association, Guindy, told Business Standard that the SPV was also approaching Larsen & Toubro to take up the upgradation project along with the Rs 48 crore upgradation project of Ambattur, Tirumudivakkam and Thirumazhisai industrial estates in Chennai.

However, he said that works related to laying water pipes had already been done by the Metrowater and connections to individual units remained to be provided. The Sewage Board of Metro Water too has started its works.

About Rs 2 crore has already been given to Metrowater, he said. All efforts would be taken to ensure that the project starts in May. Gopalakrishnan had earlier said that the SPV decided to retender the contract as the final bid was found 60 per cent higher than the SPV's expectations and it could not find a solution with the contractor.

The SPV floated tenders in December 2005 for the Rs 12.5 crore public-private partnership project to upgrade the infrastructure in Guindy Industrial Estate under integrated infrastructure development scheme.

The infrastructure upgradation project includes widening and strengthening of existing roads of about 21.50 km within the industrial estate, construction of cross drainage works and storm water drains, and street lighting. The contractor should also maintain the improved facility for a period of five years.

Of the Rs 12.5 crore, the Centre and state government will contribute Rs 2 crore each while the unit holders will provide Rs 3.5 crore. The Chennai Corporation has committed to provide Rs 1 crore. Additional funds will be raised through loans at low interests from financial institutions that have earmarked an 'infrastructure development fund'.

The 420-acre Guindy Industrial Estate was conceived in 1956 as a cluster for small-scale engineering units. There are about 700 units in various sectors that include engineering, leather, garments, plastics and glass among others.