Rs 36.83 crore Bhandup water plant repair contract goes to firm linked to Mithi river silt scam

A Rs 36.83 crore contract to repair the water treatment plant at the Bhandup complex, which supplies water to Mumbai, has been awarded to a company allegedly linked to the Mithi river silt-removal scam. Questions were raised on Wednesday in the Standing Committee of the Mumbai Municipal Corporation over the selection of the company, Vargo Specialities Private Limited. The committee nonetheless approved the proposal the same day.

The company will replace worn-out parts of the 900 million litres per day (MLD) water treatment plant at Bhandup. The controversy arose because Jayesh Joshi, a former director and majority shareholder of the company, was named in the investigation into the Mithi river silt scam.

The Economic Offences Wing was investigating alleged irregularities in the silt-removal contracts awarded by the Mumbai Municipal Corporation in the financial years 2021-22 and 2022-23. Joshi's name came up in that probe. Reports say he was arrested in May 2025. This raised the question of how such a company was eligible for the Bhandup contract.

Additional Municipal Commissioner (Projects) Abhijeet Bangar explained why the company was allowed to take part in the tender process. According to him, two people were arrested in the case, one of them a director linked to Vargo. When it came to light that the company was participating in the Bhandup tender, the matter was referred to the corporation's senior legal adviser.

At first glance, the case was registered not against the company but against the individual concerned. The administration says that if that person is no longer associated with the company, the company cannot be disqualified on that ground alone. Bangar also clarified that legal advice was taken so that the decision could not be challenged in court later.

Two companies had submitted tenders for the project. Vargo Specialities quoted Rs 28.38 crore excluding GST, while Suez India Private Limited quoted Rs 31.59 crore excluding GST. The deadline for submitting tenders was January 21, 2026. Both companies qualified on the technical bids, and the financial bids were opened on April 21.

Because Vargo quoted a lower rate than Suez India, the corporation's hydraulic engineering department recommended awarding it the contract. According to the department, the company has met the corporation's conditions and has experience of such work for another civic department. The department also said the rates submitted are in line with current market rates.

The repair of six clarifier tanks at the Bhandup water treatment plant is planned to be completed in 24 months, excluding the monsoon period. Each tank will be worked on separately, and a three-year defect liability period will apply after completion.

The decision to award the contract for this vital water purification project in Mumbai to a company allegedly linked to the Mithi river scam has now drawn attention to the role of the civic administration.