Supreme Infra faces hurdle in bagging Mumbai project

Even after emerging as the lowest bidder, Supreme Infrastructure is facing a challenge in bagging an engineering, procurement and construction project to build a flyover in Mumbai as it has been in red for a long time now.

The project in question is the first phase of ‘Improvement of Chheda Nagar Junction’ off Ghatkopar, being implemented by the Mumbai Metropolitan Region Development Authority (MMRDA). The plan is to construct two flyovers and an elevated road to decongest the junction.

MMRDA had floated bids in February with a timeline of awarding the contract in April. It has been over a month since the infrastructure firms submitted their quotations to bag the project that has an estimated price of Rs 204.33 crore and Supreme Infrastructure has quoted around Rs 20-25 crore above the estimated price.

Since then, the officials have asked the infrastructure firm to clarify on certain issues relating to their financials.

“They are into losses. The project should not get hampered due to the financial condition of the company,” shared a source.

As a result, the MMRDA authorities want Supreme Infrastructure to prove that irrespective of the financial condition of the company they will be able to execute the project and will not get stuck mid-way.

“We are analysing if the company can be awarded the project. Soon, we will take a call on the subject. If we are convinced about the precarious financial condition of the firm, we will have no other option but to re-tender the project,” said an MMRDA official.

Moreover, in the recent past, Supreme Infrastructure’s another project which had faced some dealys due to the financial situation of the company. That’s why the government authority is now cautious, another official said.

In the March 2016 quarter, the company had reported net loss of Rs 19.21 crore and for the full financial year 2015-16, the net loss was at Rs 40.80 crore.

...& ANALYSIS

• MMRDA wants the firm to prove that irrespective of the financial condition they will be able to execute the project
   
• Demonetization affected toll revenues thereby resulting in certain issues in servicing debt