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The Brihanmumbai Municipal Corporation (BMC) plans to renegotiate the Gargai dam contract after the project cost rose to around INR 5,396 crore, about 11% higher than the original estimate. The standing committee has asked officials to revise the proposal and reduce the financial burden before approval. The project, located in Palghar, is expected to add 440 MLD to Mumbai's water supply and is targeted for completion by 2029. Cost escalation due to land acquisition, rehabilitation, and environmental requirements remains a key concern.
The Brihanmumbai Municipal Corporation (BMC) is set to renegotiate the contract for the proposed Gargai dam after the total project cost increased to around INR 5,396 crore, which is about 11% higher than the earlier estimate. The standing committee did not approve the proposal in its current form and asked the civic administration to revise the cost and bring it closer to the original projection. Advertisement
At a recent meeting, civic officials shared details of the project, including cost components, rehabilitation plans, and environmental requirements. Committee members raised concerns over the increase and indicated that the proposal needed financial correction before moving ahead. Officials informed that discussions would be held with the contractor to rework the contract value and a revised proposal would be submitted for approval.
The contract had been awarded to Soma Consortium, which had emerged as the lowest bidder. The firm has previously worked on the Middle Vaitarna dam project, which is one of Mumbai's key water sources. Despite earlier negotiations during the tendering stage, the final cost remained higher than expected, leading to the current decision to renegotiate.
The Gargai dam is an important project for Mumbai's future water supply. Once completed, it is expected to add around 440 million litres per day (MLD) to the city's supply. This will be the first major addition to Mumbai's water resources since the Middle Vaitarna dam became operational in 2014. The project is currently planned for completion by 2029.
The project cost has increased over the years. It was initially estimated at around INR 3,105 crore in 2020, but later revisions included additional expenses such as land acquisition, forest clearance compliance, rehabilitation of affected families, taxes, and other infrastructure requirements. These factors have contributed significantly to the rise in the overall project cost.
The dam will be built in Palghar district and will affect multiple villages in the region. Around 187 families are expected to be directly displaced due to the project, while about 432 families will be covered under a voluntary rehabilitation plan. The resettlement process is being planned in a way that reduces human-wildlife conflict, which is a concern in the forest areas around the project site.
The project has also faced delays in the past due to environmental issues, especially related to forest clearances and tree cutting. It was first proposed several years ago but did not move forward due to these challenges. It was later revived as part of Mumbai's long-term planning to address the gap between water demand and supply.
Mumbai continues to face increasing pressure on its water resources due to population growth and urban expansion. Projects like Gargai dam are part of a broader plan to improve supply, along with other initiatives such as dam expansion and desalination. However, cost control and proper implementation remain key factors for timely execution.
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