Systra breached confidentiality of contract, violated Indian laws: MMRDA

The agency has drafted a 27-page explanation to the urban development department, which was accessed by Hindustan Times

Mumbai: Even as the Maharashtra government ordered an inquiry into French engineering and consulting company Systra’s allegations of corruption against senior officials of the Mumbai Metropolitan Region Development Authority (MMRDA) related to metro projects in the city, the agency has drafted a 27-page explanation to the urban development department in which it accused the French firm of breaching confidentiality terms of their contract, violating multiple Indian laws, and making engineering and design flaws, among other contraventions.

Mumbai, India - September 05, 2022: An aerial view of Metro train running slow during its dynamic testing on Metro Line-7 (Red Line) Phase-2 between Aarey Station and Andheri (East) Station on Western Express Highway, Jogeshwari, in Mumbai, India, on Monday, September 05, 2022. (Photo by Vijay Bate/HT Photo) (HT PHOTO)

In its letter, which Hindustan Times accessed, MMRDA claimed that “...the issues extended beyond cost overruns and included multiple violations of Indian laws, such as the Labour Act. Additionally, breaches of the confidentiality provisions of the contract, unauthorised secondment arrangements by Systra, and possible security breaches involving sensitive Metro-related information being accessed by unauthorised individuals or organisations were identified. Instances were also noted of unauthorised third-party personnel being engaged at Metro sites in 2023, submission of erroneous estimates, lapses in safety protocols, negligence in maintaining quality standards, among other deficiencies.”

MMRDA also claimed that Systra had appointed engineering staffing firm Ven Consulting India without its written consent. The firm, therefore had access to sensitive documents such as the metro project’s designs and drawings. “...uncontrolled/unrestricted sharing with unauthorised person may jeopardize the security of Metro infrastructure,” the MMRDA wrote in a letter to Systra in December 2022.

The agency also pointed out that submitted an unsigned representation to the French embassy when it levelled the allegations against MMRDA, which could be a breach of the confidentiality clause. “...it is critical to assess the potential consequences of sensitive project-related information—such as drawings, structural details, site information, programs, drone videos, schedules, and other critical data—being shared with unauthorised individuals or entities outside the purview of the contract agreement,” the agency wrote.

MMRDA metropolitan commissioner Sanjay Mukherjee clarified that according to the Maharashtra government’s policy, “an unsigned document can only be treated as a mere printout of wild allegations. The French Embassy merely forwarded this printout without endorsing its veracity or merit”. The allegations of graft were made only after MMRDA issued suspension and termination notices to Systra, he added.

Further elaborating on the MMRDA’s reasoning behind suspending Systra’s consultancy contract last month, Mukherjee said there were performance deficiencies, cost overruns, and safety breaches. Despite assurances from Systra’s global CEO during the World Economic Forum’s conference in Davos on January 18, their performance failed to improve, he said. No such allegations were ever raised before any official forum prior to these notices, including at Davos, he added.

On January 3, Systra India’s managing director, Hari Kumar Somalraju, had written to the urban development department’s additional chief secretary, Aseem Kumar Gupta (who has now been asked to investigate the charges), chief state secretary Sujata Saunik and principal secretary to the chief minister, Ashwini Bhide, wherein he raised concerns over a delay in payments to the tune of ₹92.34 crore, delayed approvals and responses, and a notice to suspend the company and descoping of works. The letter did not mention the demand for undue favours, the MMRDA claimed. Just over a month later, on February 6, the MMRDA served suspension notices to Systra.

When Hindustan Times reached out to Systra for its reaction to the MMRDA’s allegations, the company replied, “We will soon issue an official statement from Systra’s end... The legal team is doing their part over the case.”