Mumbai: MMRDA ends monorail contract with LTSE for failure to meet obligations

Updated: Dec 15, 2018, 18:19 IST | A Correspondent | Mumbai

A press release stated that MMRDA, as provided in the contract, will encash the bank guarantee given by LTSE amounting to approximately Rs 200crore

MMRDA ended contract over failure to fulfill contractual obligations
MMRDA ended contract over failure to fulfill contractual obligations

The Mumbai Metropolitan Region Development Authority(MMRDA) on Friday has finally acted on the delay in getting the monorail up and running, by terminating the contract with LTSE – the joint venture by Larsen & Toubro Ltd and SCOMI Engineering BHD (LTSE) – for their failure to fulfil contractual obligations.

MMRDA sources told mid day that it was Scomi that was primarily responsible for termination of the contract and not L&T, as it was the civil works contractor that had not met its contractual obligations of completing the work.

"This was an unfortunate decision that MMRDA had to make. The contract was entered into in 2008 when the first 9-km long phase from Chembur to Wadala was thrown open to the public," said R A Rajeev, Metropolitan Commissioner, MMRDA.

He added, "MMRDA also gave them a long rope to enable them to recover from the situation. However, LTSE failed to supply the Rolling Stock Trains, failed to Operate and Maintain the system on the entire corridor and failed to rectify defects as per the contractual clauses. This also resulted in inordinately delaying starting of Phase-2 of the Monorail from Wadala to Sant Gadge Maharaj Chowk. Also, LTSE failed to maintain the quality of monorail services."

A press release stated that MMRDA, as provided in the contract, will encash the bank guarantee given by LTSE amounting to approximately Rs 200crore. MMRDA also said that all decisions were taken after the contractor failed to respond to the legal notice. "MMRDA further clarifies that the present Indian staff of LTSE working for O&M activities of monorail will be hired through an external agency. The monorail service will continue to run as per schedule."

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