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Reliance Infra Quits Huge Mumbai Metro Rail Project

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Blaming the Maharashtra government for not honouring "certain critical obligations", Reliance Infrastructure (RInfra) has ended an agreement to develop a Rs 12,000 crore (about $2 billion) metro rail line in Mumbai.
"Due to non-fulfilment of various obligations by the state government, the concession agreement for the Mumbai Metro Line 2 (Charkop-Bandra-Mankhurd corridor) is terminated despite the best efforts by the company and the state," the Anil Ambani-led company said in statement.
The announcement comes after months of rumours about the company walking out of the project and within days of the new BJP-led government assuming power in Mumbai.
The 32-km-long, fully-elevated Charkop-Bandra-Mankhurd corridor project was awarded to an RInfra-led consortium through an international competitive bidding in August 2009.
RInfra, part of the Anil Dhirubhai Ambani Group, held a 48 per cent in Mumbai Metro Transport Private Limited (MMTPL), the company created to undertake the project.
Canada's SNC Lavlin and Reliance Communication Ltd held 26 per cent each in MMTPL, which was to build and operate the project for 35 years, extendable by another 10 years.
The statement further said the concessionaire signed the termination agreement at "no cost and no claims" to either party and the state administration will return the Rs 160-crore bank guarantee to the company.
The company had achieved financial closure for the project way back in October 2010.
French company Systra was the civil design consultant for the project.
RInfra already runs the city's first metro line connecting the western suburb of Versova with Ghatkopar on the east since May.
The second line was stuck due to pending environment clearances for a car depot at Mankhurd on the northeastern suburb planned to take care of maintenance work.
The state government and RInfra had signed the termination agreement at "no cost and no claims" to either party, the release said, adding the state would return the bank guarantee of Rs 160 crore to the company.
Mutually Agreeable
The Mumbai Metropolitan Region Development Authority (MMRDA) said the concession agreement arrived at between the state government and Mumbai Metro Transport (RInfra-led consortium) has been terminated "mutually".
"The concession agreement arrived at between the State and MMTPL has been terminated mutually. A formal communication from MMTPL for return of the bank guarantee is awaited and the procedure to return the money will follow immediately thereafter," the State-run development agency said in a statement this evening.
With the termination of the agreement, all commitments or liabilities of RInfra towards the project have been annulled with immediate effect, the statement added.
The previous Congress government led by Prithviraj Chavan had merged the Charkop-Bandra-Mankhurd metro corridor with the proposed Dahisar-Charkop line and also planned to construct the entire project underground instead of elevated line as originally planned.
The new Dahisar-Bandra-Mankhurd line will be around 40.2-km long and will have 37 underground stations and is estimated to cost over Rs 28,000 crore, the costliest project ever undertaken in the state.
The city development authority is currently conducting a feasibility study on this line.
The MMRDA is also in the process of finalising bidders for the third 32.5-km Colaba-Bandra-Seepz underground corridor envisaging an investment of Rs 23,000 crore.
The state has also decided to execute both metro projects under engineering, procurement and construction (EPC) model.
RInfra had not participated in the bidding process for the third line.