Mumbai: Anil Ambani-led Reliance Infrastructure Ltd (R-Infra) has pulled out of a contract to build the second line of the Mumbai metro project costing 12,000 crore because it says the Maharashtra government could not fulfil some critical obligations.

The company and the state government have executed a termination agreement to end the concession for the Mumbai Metro Line 2 project, which is expected to link Charkop to Mankhurd via Bandra, R-Infra said in a statement.

The agreement was terminated at no cost or claim to either party, and the state government will return a bank guarantee of 160 crore, the statement said.

The second line of Mumbai Metro was scheduled to be built by Mumbai Metro Transport Pvt. Ltd (MMTPL), in which Ambani’s R-Infra holds a 48% equity.

The 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.

A statement issued by the Mumbai Metropolitan Regional Development Authority (MMRDA) said the concession agreement was terminated with mutual consent.

“So far we have not received a formal request from R-Infra to release bank guarantee furnished by R-Infra; once we receive a formal request, steps would be taken immediately to release the same," the statement added.

A senior MMRDA official who did not want to identified said, “The termination of contract between MMRDA and R-infra does not mean we have scrapped the project; in fact, we are now exploring the possibility of extending it to Dahisar. And, as decided earlier, all future lines of Mumbai Metro will be constructed by Mumbai Metro Railway Corp. Ltd (MMRCL), a joint venture between the state government and the Union government. Line 2 will be constructed by MMRCL."

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 5,700 crore project cost, while DAMEPL brought in the rolling stock and was supposed to run it for 30 years.

Close