Mumbai’s plan of offering its citizens a fast and convenient mode of travel and decongesting the city’s streets suffered a setback on Thursday with the Anil Ambani-led Reliance Infrastructure (R-Infra) announcing it was pulling out of the proposed Mumbai Metro Line 2 due to “non-fulfilment of various critical obligations” by the Maharashtra government.
Mumbai Metro Line 2 was planned as a 32-km metro corridor connecting Charkop in north Mumbai with Mankhurd in the east via the western suburb of Bandra. The project remained a non-starter for four years after the state government signed the concession agreement with the Mumbai Metro Transport (MMTPL), a consortium led by R-Infra, in January 2010.
The state government had called for international bids to award the metro project in August 2009. “Even after four years, despite best efforts of the government of Maharashtra, various project impediments could not be resolved,” R-Infra said in a statement on Thursday.
The agreement has been terminated mutually, “at no cost or claim to either party”.
The Maharashtra government will also return the R160-crore bank guarantee furnished by R-Infra, the statement said. A spokesperson for the Mumbai Metropolitan Regional Development Authority (MMRDA) said that it was yet to officially hear from R-Infra asking it to return the bank guarantee and it will begin the process of doing so when it received a formal request from the company.
The decision to mutually terminate the project was a formality after the viability of the project came into question with the state government deciding to re-examine the route may for Mumbai Metro Line 2 as it couldn’t attain environmental clearance for constructing a car depot in Mankhurd. The original project cost was pegged at R7,660 crore, which was later revised to R8,250 crore and according to the R-Infra statement issued on Thursday, the project was estimated to cost R12,000 crore.
The stand-off over non-availability of land for the car depot has been going on between R-Infra for the last two years. While MMRDA was urging MMTPL to start construction on the project, the consortium had taken a stand that it would not go ahead with the project unless the entire right of way and necessary environmental clearances were secured. In 2012, MMRDA referred the matter to the state government, asking it to take a decision regarding the project and the contract with MMTPL.
The state government has since drawn up a new plan for Mumbai Metro Line 2 that entails increasing the length of the corridor to 40 km from from Dahisar in north Mumbai till Mankhurd, via Charkop and Bandra. The proposed project cost is now being pegged at almost R29,000 crore.
Securing right of way in a congested city like Mumbai has been an impediment to infrastructure creation in the past as well. R-Infra, which also constructed the first phase of Mumbai’s metro rail, delivered the project after a considerable period of delay, which it blamed on inadequate right of way. The metro, which runs between Versova and Ghatkopar, has been operational since June, more than two years behind schedule.
The project eventually cost around R4,000 crore versus the originally estimated project cost of R2,356 crore.
January 17, 2010: Concession agreement between Maharashtra and R-Infra – project cost revised to R8,250 crore
2010-2012: State government tries but fails to get green nod for the project; asks R-Infra to begin work. Company declines to go ahead without clearances
2014: State government decides to make the route 40 km-long, underground metro line. R-Infra pulls out on Thursday