Reliance Infra cancels Mumbai Metro 2 concession agreement

Agreement terminated at no cost or claim to either Reliance or Maharashtra govt

Reliance Infrastructure today announced the cancellation of Mumbai's Metro Line 2 project citing non-fulfilment of certain obligations by the Maharashtra government.

"Mumbai Metro Transport Pvt Ltd wherein Reliance Infrastructure holds 48% of the equity and government of Maharashtra have terminated the concession agreement for the Mumbai Metro Line 2 Project (Charkop -Bandra-Mankhurd corridor)," the company said in statement.

The project was awarded by the Maharashtra government to Reliance Infrastructure-led consortium in August 2009 through international competitive bidding. The estimated cost of the project was about Rs 12,000 crore.

"Due to non-fulfilment of various critical obligations, by GOM/ Mumbai Metropolitan Region Development Authority (MMRDA), the project could not take off. Even after four years, despite the best efforts of the Maharashtra government, various project impediments could not be resolved," Reliance Infrastructure said.

Both parties agreed to terminate the concession agreement at no cost or claim to either party. The government of Maharashtra will return the bank guarantee (of Rs 160 crore) to Mumbai Metro Transport Pvt Ltd.

With the termination of the agreement, all commitments or liabilities of Reliance Infrastructure towards the project including the commitments towards funding the project have been annulled with immediate effect.