Reliance Infra terminates Mumbai Metro Line II contract

Reliance Infrastructure Thursday said it has terminated its agreement for the Rs.12,000 crore Mumbai Metro Line II project due to, what it said was, a failure by the Government of Maharashtra to fulfill its obligations.

The company has also asked for the return of Rs.160 crore bank guarantee.

In a statement, Reliance Infra said the various obligations listed under the concession agreement were not fulfilled by the state government for the project to connect Charkop in north Mumbai with Bandra in the west and Mankhurd in the east.

"The Government of Maharashtra and the concessionaire signed the termination agreement at no cost and no claims to either party," Reliance Infra said, adding that the bank guarantee of Rs.160 crore was to be returned to it.

Releasing its results for the second quarter of this financial year, Reliance Infra had Wednesday said its actual net profit of Rs.431 crore would have been higher by some 13 percentage points, but for the loss of Rs.57 crore on the Mumbai metro project.

Mumbai Metro One, also called the Line I project, is already being operated by a joint venture between Reliance Infra Veolia Transport of France and the Mumbai Metropolitan Region Development Authority.

Awarded in 2007 after an international competitive bidding process, the Line I project was country's first for mass rapid transport on a public-private partnership mode. Reliance Infra with 69 percent is the majority shareholder, as per its Web site.

In the case of Line II project, Reliance Infra holds a 48 percent stake in the company formed specifically for the purpose while SNC Lavlin of Canada and Reliance Communication hold 26 percent each.