Reliance Infra pulls out of Mumbai Metro Line II contract, project to be retendered

The Anil Ambani-led Reliance Infrastructure Ltd (R-Infra) has pulled out of a contract to build the second line of the Mumbai Metro project, necessitating a retendering of the Rs12,000 crore project.

Reliance Infrastructure pulled out of the Mumbai Metro Line II project, because of alleged failure of the Maharashtra government to fulfill some critical obligations.

The second line of Mumbai Metro which is expected to link Charkop to Mankhurd via Bandra, was scheduled to be built by Mumbai Metro Transport Pvt Ltd (MMTPL), where Anil Ambani-controlled RInfra holds 48 per cent equity.

The agreement was terminated at no cost or claim to either party, and the state government will return a bank guarantee of Rs160 crore, R-Infra said in a statement. 

"The concession agreement arrived at between Maharashtra government and the Mumbai Metro Transport Pvt Ltd has been terminated mutually. A formal communication from MMTPL for the return of the Rs160 crore bank guarantee is awaited and the procedure to return it will follow immediately," MMRDA Joint Project Director D Kavathkar said.

He said the retendering will follow once these formalities are completed, adding that the project will be awarded to the lowest bidder.

Maharashtra government had awarded the project through global competitive bidding to a consortium led by R-Infra on 3 August 2009. The concession agreement was executed on 21 January 2010 between the state government and MMTPL.

''Due to non-fulfilment of various critical obligations by Maharashtra government and Mumbai Metropolitan Region Development Authority (MMRDA), the project could not take off. Even after four years, despite the best efforts of the Maharashtra government, various project impediments could not be resolved,'' R-Infra said.

R-Infra had not received about 17 clearances from the government, a company executive said on condition of anonymity.

''Out of 17, major issues were availability of unencumbered land for building depots at proposed Charcop and Mankhurd stations; failure of state government to obtain necessary environment clearances from ministry of environment and forests, and grant of 100% rights for construction,'' the executive said.

In July 2013, R-Infra had pulled out of an agreement with Delhi Metro Rail Corp Ltd (DMRC) for the Delhi airport metro project. A company spokesperson said it exited operations owing to DMRC's failure to cure substantial defects in civil structures designed and built by DMRC.

The 22.7km Delhi airport metro line, which links New Delhi railway station with the T3 terminal, was built by a special purpose vehicle Delhi Airport Metro Express Pvt Ltd (DAMEPL), a unit of R-Infra. DMRC built the civil infrastructure and spent more than half of the Rs5,700 crore project cost, while DAMEPL brought in the rolling stock and was supposed to run it for 30 years.