Reliance Infrastructure Exits Contract of Phase II of Mumbai Metro Project
The Government of Maharashtra recently announced its plans of abandoning the model of private and public partnership that it had entered for the development of Mumbai Metro project in its second phase and has recently decided on modelling and building the project itself. This decision comes after Reliance Infrastructure exited the project partnership.
In early November, Reliance Infrastructure in tandem with the state government announced its mutual decision to terminate the contract applicable for Mumbai Metro’s second developmental phase. The project has been in a limbo for the past 5 years. Earlier, Reliance Infrastructure had bagged the project to operate, transfer and build phase 2 of the Mumbai metro that had plans of connecting areas including Bandra, Charkop and Mankhurd back in the year 2009.
Possible reasons:
The Maharashtra state government has stated that the condition of the market is poor as the private developers do not have much appetite for taking risks. Hence they have decided on developing the project on their own.
Reliance Infrastructure is reported to have stated that certain contractual obligations were not fulfilled by the government because of which they decided to exit the second metro project.
Project Plans:
The Government of Maharashtra plans to seek funding from overseas, as stated by UPS Madan, the Metropolitan Commissioner, Mumbai Metropolitan and Region Development (MMRDA).
A new proposal is to be planned and finalised in the course of the coming two weeks by the MMRDA which is the key nodal agency as far as the city’s metro railway project is concerned.
Bids have been invited for the third phase of the Mumbai Metro that plans to connect Colaba to Seepz via Bandra but that too is running behind schedule. Work for this is expected to begin by mid-2015 as against an earlier date of end 2013. Lines 2 and 3 for the project will be worked upon simultaneously.
Estimated Costs:
Taking into account the extension of lines and connection of places including Dahisar, Mankhurd, Bandra and Charkop, the project is estimated to be really expensive as far as infrastructure projects go and should be worth around Rs.30,000 crore.
The economy is undergoing many upheavals in sectors like infrastructure, as a result of which, no company is willing to invest in such a huge project. International lenders are now being relied upon for financing this project and contractors should be getting their orders by the year 2016.
Source: The Economic Times
Mumbai metro project, mumbai metro project status, Mumbai Metropolitan and Region Development, private and public partnership, Reliance Infrastructure
