Rs1,155cr fine notice for MMOPL

In a move that could escalate into a full-fledged war between the two agencies responsible for Metro-1, the Mumbai Metropolitan Region Development Authority (MMRDA) has slapped a notice on Reliance Infra-headed Mumbai Metro One Pvt Ltd (MMOPL), the company that developed the Metro and operates it.

The notice asks MMOPL to pay Rs1,155 crore for failing to complete the Versova-Andheri-Ghatkopar Metro project in time. The penalty has to be paid within 30 days. Sanjay Sethi, MMRDA additional commissioner, said, “We have sent the notice to MMOPL as it has failed to fulfil some of the conditions prescribed in the concession agreement.” Services for Metro-1 were supposed to start in December 2010. However, it became operational only in June last year, following several delays.

PRK Murthy, chief of the transport and communication department of MMRDA, said, “MMOPL did not attain internal deadlines on time as sought by the agreement. We will initiate legal action against MMOPL if it does not pay the penalty.”

Significantly, MMOPL has already sent several notices to MMRDA, alleging that the project cost increased because MMRDA failed to give required land in time and changed designs several times. The MMOPL’s claim is pegged at Rs1,500 crore. An MMOPL spokesperson said, “We have received a letter of claim from MMRDA, which is being examined. Prima facie, it is not based on appropriate grounds. MMOPL has already filed a claim with MMRDA of over Rs1,500 crore.”

MMOPL has already taken the matter up for arbitration. While MMRDA officials claimed that its notice to MMOPL has nothing to do with the arbitration process, sources close to the development revealed that the move can be seen as a precursor to arbitration.

MMRDA has nominated justice Jeevan Reddy, while MMOPL has nominated justice Gyan Sudha Mishra, for the arbitration tribunal. The third, mutually appointed member is yet to be appointed.