MTDC issues explanation on Shopping fest

Mumbai: Four days after news reports about the Mumbai Mela Shopping Festival being mired in controversy, the Maharashtra Tourism Development Corporation (MTDC) Thursday clarified that the contract alleged to have serious financial implications had been terminated a month ago by following due procedure. Hence, neither MTDC nor the government had suffe-red any losses, contrary to reports published in various newspapers.

However, the government clarification rema-ined silent over allegations leveled by the then managing director Suhas Diwase at joint managing director of MTDC Ashutosh Rathod, who was holding additional char-ge as MD of MTDC for the few days when the deal was struck.

According to Mr Diwase, Mr Rathod ignored the observation of the chief accounts officer of the MTDC about the contract and signed an agr-eement for a period of fi-ve years, resulting in a financial liability of over Rs 20 crore for MTDC. The clarification stayed mum on the proposed enquiry against Mr Rathod and the then MD.

The Asian Age on Monday reported that the principal secretary of the tourism department in October sought permission from the tourism minister Jaykumar Rawal to file a FIR for criminal conspiracy against Mr Rathod, but nothing had happened so far in this regard.

A bureaucrat familiar with the Mumbai Mela Shopping Festival said that the clarification issued by the MTDC was misleading and irrelevant.

According to the clarification, a RFP had been published for organising the festival and an IOE had been invited. One Oaks Management Pvt. Ltd. had been selected through the bidding process. The cost of organising the festival was Rs 12 crore and 50 per cent funds had been arranged by the company, with the remaining amount to be paid by the tourism department on the principle of Viability Gap Funding (VGF). Further, the RFP had been invited for a period of one year. As the Mumbai Mela Shopping Festival and Elephanta Festival were celebrated regularly, a detailed discussion had been held as to why the agency could not be appointed for five years.

The idea was that appointing an agency for five years would enhance the quality of organisation and arrangements. Also, confirming stakeholders for five years would increase the number of visitors, and the project would evolve into a self-sustainable model. These aspects had been discussed with the concerned agency. During the discussions, the VJF cost had been reduced from the original Rs 5.60 crore to Rs 4.20 crore, with the agency agreeing on raising the same amount for the festival. After this, the agreement for the five years’ contract was signed. The exercise saved `1.20 crore. Owing to technical procedures however, the MTDC cancelled the contract agreement one month ago. Hence, there was no question of the MTDC incurring any  losses any more.