Mumbai’s Metro II project cancelled; Metro I and other Infra projects in deep trouble

September 3, 2013

Written by Ajaz

Maharashtra CM Prithviraj Chavan virtually confirmed on Friday that Mumbai’s Metro line 2 has been cancelled because of the ‘Build-Own-Operate-Transfer’ (BOT) model’s failure in metro projects and there are major disputes over Metro I project too.

“There are some disputes between the government and the developer Reliance Infra(R-Infra) in Metro 1 project too. The developer is asking for tariff hike so we are considering all options including taking over the metro project”, CM Prithviraj Chavan told a select group of reporters at his residence in Mumbai on Friday night. Speaking specifically about Mumbai’s infrastructure projects being hit by the economic slowdown, Chavan said “It is not easy to build infra projects in Mumbai the city is very dense, there are issues like litigation and that causes delays. These delays have resulted in huge cost escalation and now many problems have been created because of this. The developer in Metro I project is asking for major hike in tariff and advertising rights etc. We are not sure how this will work out. One option is to go into arbitration and the other is to negotiate. If it gets worse, we may think of even taking over the Metro project. It is now clear that Mumbai’s Metro II project will now not happen.”

CM Chavan said “There has been a lot of talk of late about Mumbai’s infrastructure projects getting delayed. The problems are multi-fold. The latest is that we have received no bids for the Rs 9800 crore Mumbai Trans Harbour Link (MTHL). This is mainly because of the economic slow-down and the lack of confidence among private players.The falling rupee has hit all the players and the foreign partners of the developers are not sure about how things will pan out. The uncertainty about the Navi Mumbai international Airport Project is also responsible for this problem as developers think that if the airport does not come there will not be enough traffic on MTHL.

“Though Metro I project which will connect Mumbai’s Versova to Ghatkopar is 95% complete, the safety tests and some finishing work is still on. But the real issue is the fare structure. We are trying to work out some solution”, Chavan added

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