MMRDA sends notice to Monorail operator for ‘incompetence, delays, negligence’

MMRDA’s notice to LTSE was served under the clause of “termination by employer” for “gross negligence”, “incompetence”, “lack of interest in successfully completing the project” and “faults” in construction and operation of the Monorail.

After giving seven extensions for the Mumbai Monorail project, suffering an eight year delay, several accidents and huge losses, the Mumbai Metropolitan Regional Development Authority (MMRDA) recently served a show-cause notice to the consortium of Larsen and Toubro Limited and Scomi Engineering (LTSE).

The Monorail service was started from Chembur to Wadala in Mumbai, on September 1, 2018. (Kunal Patil/HT File)

MMRDA’s notice (a copy of which is with HT) to LTSE was served under the clause of “termination by employer” for “gross negligence”, “incompetence”, “lack of interest in successfully completing the project” and “faults” in construction and operation of the Monorail.

In its notice, which was served on December 7, MMRDA stated that non-compliance to its requisitions by December 13 will result in the authority taking appropriate actions against LTSE for “breach of contract” and “non-performance”, which may also include forfeiting a security deposit of ₹200 crore.

An MMRDA official, requesting anonymity, said, “We have not received a reply from LTSE as of Wednesday evening.”

While L&T declined to comment, a source close to the project said, “MMRDA has failed to pay LTSE for a long time. How can the consortium function without money? The notice therefore has no locus-standi.” Despite multiple attempts, there was no reply from Scomi Engineering.

However, MMRDA has stated it paid ₹67 crore to LTSE in 2015 to overcome a “cash-crunch” and ₹16.34 crore between February and October 2017 on the consortium’s requests. However, LTSE failed to even pay the rent for a casting yard, despite several reminders, MMRDA said.

While the target for commencement of the entire corridor was May 13, 2011, it is still not ready despite seven extensions. “While you have been granted the extended date of completion and commissioning of the entire system until December 31, 2018, it is evident from the status of work, your action and attitude of your representatives (that) you will fail in complying with all of its obligations under the contract,” the notice states.

Currently, phase 1 (from Wadala to Chembur) is operational and MMRDA was planning to start operations till Jacob Circle by December. MMRDA also stated LTSE’s failure to run phase 1 in its optimal rate and inordinate delays has resulted in revenue loss for MMRDA and caused public inconvenience. “The matter of defaults and negligence by the contractor has also been taken up by the Public Accounts Committee of the state government,” the notice states.

Further, MMRDA stated that LTSE’s negligence has resulted in several accidents on the corridor, including a fire in November 2017 that charred two coaches of a rake, caused a loss of ₹33 crore and led to the corridor being shut for almost a year.