The Mumbai Metropolitan Region Development Authority (MMRDA) has terminated its contract with the joint venture of L&T and Scomi Engineering (LTSE) for the operations and maintenance of Mumbai’s monorail system.

FE had first reported on June 15 that MMRDA was planning to issue a termination letter to LTSE due to a number of maintenance-related issues such as break downs, jamming of doors and a major fire that broke out in November 2017 in which two coaches were burned while a station building and platform were damaged.

In a statement issued on Friday, RA Rajeev, metropolitan commissioner, MMRDA, said, “MMRDA gave them a long rope to enable them to recover from the situation. However, LTSE failed to supply the Rolling Stock Trains (RST), failed to operate and maintain the system on the entire corridor and failed to rectify defects as per the contractual clauses. This also resulted in inordinately delaying starting of Phase-2 of the monorail from Wadala to Sant Gadge Maharaj Chowk. LTSE failed to maintain the quality of monorail services”.

MMRDA said the decision was taken after the contractor failed to respond to its legal notice. It added that as per the terms of its contract, it will now encash the bank guarantee given by LTSE, amounting to approximately Rs 200 crore.

The authority had first proposed the monorail in November 2005. In 2008, the contract for the 19.5 km long first line was awarded to L&T, along with the Malaysian partner Scomi Engineering. The contract, worth Rs 2,460-crore, was to build and operate the monorail until 2029. However, LTSE failed to keep its part of the bargain. After it opened the first phase, a 8.9-km long line that became operational in February 2014, it has been unable to operate and maintain the same efficiently. It has also not been able to open the second phase as per schedule.

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MMRDA now plans to commission the second phase of the monorail sometime early next year. It will be issuing a global tender for procuring additional rakes.