French firm accuses MMRDA of corruption, seeks diplomatic intervention

The French company has alleged that MMRDA officials demanded benefits and intentionally delayed payments. Systra has raised these concerns with the Indian government and sought diplomatic intervention

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Systra, a prominent French engineering firm responsible for designing and supervising Mumbai’s metro projects, has accused senior officials at the Mumbai Metropolitan Region Development Authority (MMRDA) of corruption, according to a PTI report.

 

The French company has alleged that these officials have demanded improper benefits and intentionally delayed payments. Systra has formally raised these concerns with the Indian government and sought diplomatic intervention. It pointed to issues like pressure to increase contractor orders, delays in approving essential personnel, and the imposition of unjust fines.

 

In response, Systra sought assistance from the French embassy, which, in a letter dated November 12, 2024, urged Rupinder Singh, Maharashtra’s resident commissioner in Delhi, to step in. The embassy highlighted the ‘significant harassment and difficulties’ Systra has faced as the general consultant for MMRDA initiatives.

 

Maharashtra Chief Minister Devendra Fadnavis, unaware of the complaint initially, assured he would consult Chief Secretary Sujata Saunik, while underscoring his administration’s commitment to transparency.

 

Intentional effort to tarnish image: MMRDA

MMRDA dismissed the accusations as unfounded, labeling them an intentional effort to tarnish its image and that of its staff. Systra, in its embassy-supported complaint, emphasised its long-standing success in managing rail and metro projects across India. It noted that since August 2023, operational challenges have intensified, including a payment freeze starting in January 2024. The company appealed for a thorough investigation and expressed its willingness to collaborate with MMRDA peacefully, free from coercion.

 

According to Systra, the issues emerged after a change in MMRDA leadership in August 2023. As the general consultant for Metro lines 5, 6, 7A, 9, 10, and 12, and the detailed design provider for lines 2A, 7, and related depots, Systra claims officials began soliciting financial favors, subtly framed as directives from superiors, including the metropolitan commissioner. The firm refused to comply, it said.

 

MMRDA countered that it had investigated the matter internally and submitted a report to the government, uncovering several breaches by Systra, such as cost overruns ranging from 4.27 per cent to 10 per cent and other contractual violations. The agency has issued a termination notice to Systra, citing security and operational shortcomings, and described the situation as a commercial disagreement that Systra is improperly escalating into a diplomatic issue.

 

Matter under court review

Systra’s Mumbai General Manager, Arun Mishra, declined to comment, noting that the matter is under review in the Bombay High Court. The company alleges that between January and February 2024, MMRDA halted payments, citing resolved issues on lines 5, 9, 7A, and 6, and altered contract terms for lines 10 and 12 despite prior resolutions. While payment suspensions were lifted for some lines in June 2024 after Systra’s protests, Rs 30 crore remains unpaid for civil works on lines 5, 9, and 7A. Systra also claims MMRDA pressured it to approve inflated contractor orders for line 9, linking non-compliance to ongoing payment delays and threats to end its consultancy role.

 

The firm further alleges similar tactics are being used against DB E&C, a German consultancy partnered with Systra on lines 10 and 12. Payments for these projects have stalled, even where suspensions were lifted, while MMRDA has also delayed staff approvals, imposed random penalties, and demanded certifications for payments to smaller contractors it directly employed.