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Home > India > Business > Business Headline > Report

ADAG pulls out of Mumbai sea-link project

June 13, 2008 02:51 IST

The consortium led by Anil Dhirubhai Ambani Group company (ADAG) RELINFRA has decided not to seek an extension of the bid for the Rs 6,000-crore, 22-km sea link project between Sewri and Nhava-Sheva citing the state government's "indecisiveness" over awarding the contract.

A consortium of RELINFRA and Hyundai had won the bid for the project in February but the state government ordered a review on grounds that the concession period -- or the period for which the developer collects toll to recover its costs -- was unrealistically low.

RELIINFRA's withdrawal effectively leaves the field free for the only other bidder -- the consortium of Mukesh Ambani-promoted SeaKing Infrastructure Ltd (SKIL) and IL&FS. The RELINFRA consortium had quoted a concession period of nine years and 11 months against the SKIL consortium's 75 years.

RELINFRA submitted the bid documents in December. Under the conditions of the bidding process, a bid document is valid for six months after this. This period lapses on 13 June but RELINFRA has decided not to apply for an extension, as the state government had requested.

"It is not correct to say we are pulling out of the project because it is not as though the project is being offered to us and we are rejecting it," a senior RELINFRA official told Business Standard.

"In this case, we are not sure whether we will be getting the project and, if we are getting it, when," he explained.

Meanwhile, the state cabinet's committee on infrastructure, which is chaired by Chief Minister Vilasrao Deshmukh, postponed the decision on the project by a week.

The controversy began last month when the state government asked the Maharashtra State Road Development Corporation (MSRDC), which is a nodal agency for the project, to get both bids evaluated from a consultant owing to widely differing concession period.

Last week, London-based Dar Consultants submitted a report saying both bids are worth considering. 

At Thursday's meeting of the cabinet committee MSRDC forwarded four proposals for consideration, which included awarding the project to RELINFRA. The other three options were a re-tender, rebids by RELINFRA and SeaKing or MSDRC going it alone.

Deshmukh also reportedly told the MSRDC to examine the credibility and feasibility of the bids submitted by the two consortiums led by the Ambani brothers and come up with concrete suggestions.

"The project is of the enormous importance to the city and that's why we are being cautious," said minister for public works Anil Deshmukh, justifying the delaying of the decision.

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