In what the Opposition smells a rat, the Municipal Corporation Standing Committee has approved granting a seven-year duration operations and maintenance contract of BRTS buses and bus stations.

Being dubbed as a premature decision, it will cost the Ahmedabad Janmarg Ltd a whopping Rs 136 crore.

The contract to the Mumbai-based Kaizen Engineering Pvt Ltd was decided with majority decision in the civic Standing Committee. But the Opposition has objected to such a long term of seven years to a company which has been in business for just 10 years. In fact, Standing Committee Chairman Asit Vora too did not have any official details about the company.

In the first phase of the project, Kaizen will provide software support for vehicle tracking, automatic fare collection system, and fleet management and passenger information system. But the objection is that the AMC has no details about the firm’s local office and the letter submitted from it has only the telephone number printed on it, sources say.

Vora has put forth the argument that if the contract is awarded for two or three years as suggested by the Opposition, then it will be costlier to enter into a fresh contract after the expiry of the tenure.

“Instead, why not enter into a full-term contract to avail the current cost benefits … rates may escalate in the future and at that time, the old contract would be considered valid with static rates,” he said.

AMC will make good the difference between the income earned by Ahmedabad Janmarg Ltd and the sum spent on operation and maintenance of fleet and bus stations to AJL, as has been finalised in the contract.

Opposition leader Surendra Baxi has said the decision to enter into a long-term contract is “impractical and premature” because the project has not yet started. “You could have a three-year contract, test the service provider for his capacity to deliver, and then go for another tenure,” he said.