As reported first by Mumbai Newsline, the Rs 490-crore contract to build the dam was awarded to a joint venture of China International Water and Electric engineering company (CWE), a state-owned large scale enterprise of the People’s Republic of China along with Soma Enterprises.

“Although the relations between China and India cannot be termed as friendly, there are a number of Chinese companies already working on road and other infrastructure projects in the country. So there should be no opposition on a Chinese joint venture constructing a dam on the northern side of Karjat,” said Municipal Commissioner Jairaj Phatak, defending the civic administration’s decision on the vital installation.

“There is no possibility of Chinese engineers causing harm to water supply to Mumbai. In fact, the Brahmaputra river itself flows from China into India via Arunachal Pradesh.”

Phatak told the civic Standing Committee that the proposal should be accepted so that work could begin immediately.

The selection of the Chinese firm ran into rough water after security concerns were raised over the dam itself as well as other vital installations in its vicinity — Bhabha Atomic Research Center at Tarapur, Hindustan Aeronautical Ltd’s production unit at Deolali (Nashik) and the Indian Security Press at Nashik. The central government has also in the past expressed security concerns over state agencies entering into contracts with Chinese firms.

The Shiv Sena, which rules the BMC, itself opposed the contract, demanding re-tendering. “Our main doubt was on security but now since the municipal commissioner has taken the responsibility, we have withdrawn our opposition,” said committee chairman Ravindra Waikar, a senior Sena corporator.

Allegations regarding the credibility of Soma Enterprises have also now been put to rest. “We have verified all details and then given approval for the project,” Phatak said.

To be constructed to a height of 105 metres, the dam will be located 145 km northeast of Mumbai at Mokhada, Thane district. It is one of the most ambitious and costly projects the BMC has undertaken, at Rs 1,600 crore. Once completed in 2011, the dam will supply an additional 450 million litres of water per day.