2.5 Times Increase In Cost Of Mumbai Sewerage Project, Hit By Goods And Services Tax Hike

Mumbai, 16th January 2023: The cost of construction of a sewage treatment plant, which has been stalled for the past 10-15 years due to various reasons, is going to increase further. The project, which has been stalled for 10 years, will now have to spend more than 26 thousand crores. The groundbreaking ceremony of this project will be done by Prime Minister Narendra Modi on Thursday.

The Brihanmumbai Municipal Corporation (BMC) will set up sewage treatment plants at seven places in the Mumbai metropolis, namely Worli, Bandra, Malad, Ghatkopar, Dharavi, Bhandup, and Wesaway. The project was stalled for several years due to various reasons. The municipality prepared a master plan in 2002 to improve the sewerage service network and facilities and started the implementation of this project in 2007. However, due to a lack of space, environmental clearances, disputes over the proposed site of the project, and the Central Pollution Control Board’s standards changing from time to time, the project was stalled for the past 10 years. Then in 2018, the municipality started the actual tender process but had to re-tender three times. In all this process, the cost of the project has gone from 10 thousand crores to 26 thousand crores in the last 10-15 years. In this case, after being reprimanded by the Supreme Court, the municipal administration finally completed the tender process in May 2022 and appointed the contractor.

These sewage treatment plants are going to be set up under Mumbai Sewerage Project Phase 2. Work orders have also been given to the contractors for these works. The contract is for four years for project construction and 15 years for maintenance. At present, preparatory work is going on at the site of this project and the groundbreaking ceremony of this project will be held on 19th January. However, the cost of this project will increase due to the increase in goods and services tax (GST) by the central government in July 2022. Goods and Services Tax has been increased from 12 per cent to 18 per cent. The cost of the project in Bandra, Worli, and Ghatkopar has increased by about 400 crores.

After the construction of all seven sewage treatment plants, a total capacity of 2,464 million litres per day of sewage will be processed and reused. Along with that, environmental degradation will also be avoided.

Project Contract Price – Increased Contract Price – Increase due to GST

Worli – 9335 crores – 9519 crores – 183 crores

Ghatkopar – 4566 crores – 4652 crores – 85 crores

Bandra – 7683 crores – 7819 crores – 135 crores