In a first, the town planning authority MMRDA on Friday terminated the contract with Larsen & Toubro-Scomi Engineering, the operator of the nation's first monorail network in the megapolis, following the failure to meet contractual obligations and also decided to en-cash the Rs 200-crore bank guarantee.
The L&T consortium won the Rs 2,460-crore contract in 2009 to build and operate a 19.5-km monorail network on the Chembur-Wadala-Jacob Circle corridor connecting the eastern periphery of the island city to the central parts, until 2029. The first phase of the line stretching 8.9 km connecting Chembur with Wadala was commissioned in February 2014.
The Mumbai Metropolitan Region Development Authority (MMRDA) has also decided to take over the project and operate and maintain it and also encash the Rs 200-crore bank guarantee from the operator.
"Finally, we have terminated the contract with the L&T consortium after granting them seven extensions and to operate and maintain the network on our own in the larger public interest," MMRDA commissioner RA Rajeev told reporters.
L&T could not be immediately reached for comments.
The authority had slapped a show-cause notice to the operator on December 7, to which the company had filed an interim reply on December 13, he said.
Rajeev said the consortium was given a long rope to enable them to recover from cash crunch, but they failed to supply the rolling stocks and also operate and maintain the 8.9-km corridor.
"We cannot continue to grant more extensions. We have decided to terminate the entire contract after they have failed to respond to our legal notices. Now, we are in the process of issuing fresh tenders to procure additional rakes," Rajeev said.
The commissioner further said MMRDA, as provided in the contract, will en-cash the bank guarantee of Rs 200 crore given by the consortium.
"The authority has already paid Rs 67 crore to the consortium in 2015 to overcome their cash crunch and another Rs 16.34 crore was paid between February and October 2017. However, they failed to even pay the rent for the casting yard, despite several reminders.
"Since the company has failed to meet its obligations, we have decided that the bank guarantee paid by L&T-Scomi will not be refunded and would be treated as penalty," the commissioner said.
He further said following the termination of the contract, 198 Indians working on the project, will be absorbed by the authority.
The authority had first proposed the monorail in November 2005 and in 2008, the contract for the 18.5 km long first-line connecting Jacob Circle, Wadala and Mahul via Chembur was awarded to L&T, along with the Malaysian partners Scomi Engineering.
The Rs 2,460-crore contract was to build and operate the monorail until 2029.
The state had also planned to construct nine other monorail corridors, however, with the failure of the pilot project, it abandoned the plan to build a 190-km of monorail network across the Mumbai metropolitan region.
The entire 19.5-km Chembur-Wadala-Jacob Circle corridor was due to start in December 2010, but instead, only an 8.9-km line between Chembur and Wadala under phase 1 was finally opened on February 2, 2014.
However, the operations were shut after a coach went up in flames on November 9, 2017, while the phase 2 between Wadala and Jacob Circle is yet to be commissioned.
"As per the contract, the consortium had to supply 15 rakes, however, Scomi had supplied only 10. Of these 10 rakes, six are operational, while four are almost out of order and needs serious repairs and new spare-parts," Rajeev said.
The commissioner further said the second phase will be commissioned in the next three months.
"We will be issuing global tenders not only for spare parts and tyres for replacement, but also for additional 10 rakes. We hope in the next three months we will be able to commission the second phase depending on when we get the rakes," he said.
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