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Worli-Haji Ali sea link project faces further delay

Last updated on: December 1, 2011 13:23 IST

Worli-Haji Ali sea link project faces further delay

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Sanjay Jog in Mumbai

State road authority to appoint retired Supreme Court judge for conciliation exercise with Reliance Infra.

Commencement of a construction for the Rs 5,100-crore (Rs 51 billion) Worli-Haji Ali sea link project is expected to further delay as the state-run Maharashtra State Road Development Corporation proposes to appoint a retired Supreme Court judge to hold conciliation with the Reliance Sea Link One Pvt Ltd -- a joint venture between the Anil Dhirubhai Ambani group's Reliance Infrastructure and Hyundai Engineering .

MSRDC wants to complete this process before exploring options of arbitration and termination of concession agreement signed with the RSOPL for the project.

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Further, the BrihanMumbai Municipal Corporation's refusal to provide space for casting yard purpose as sought by the RSOPL is also expected to cause delays in the project implementation.

MSRDC official, who did not want to be identified told Business Standard "The company is yet to move further on the project development.

"There was no provision of providing space for a concession agreement. Instead of the state government, the MSRDC has agreed to provide the viability gap fund of Rs 1,392 crore (Rs 13.92 billion) required for the project.

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Image: A crowded local train in Mumbai.

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"As far as the state support agreement is concerned, whatever the government has to provide it has been done.

"Still we do not know what is stopping RSOPL from starting the project work." 

However, both the government and MSRDC are keen for the project development and in order to give a push MSRDC would launch a conciliation process with RSOPL by appointing a retired judge of the Supreme Court next week.

"We expect to have a win win situation for both the MSRDC and RSOPL which will emerge from the conciliation process.

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Image: Worli.

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"It is to be noted that MSRDC has already imposed a fine of Rs 10 lakh (Rs 1 million) per day since July 4 for the non compliance of provision relating to the financial closure and the payment of Rs 1,634 crore (Rs 16.34 billion) towards taking over of the Worli-Bandra sea link," the official said.

MSRDC and RSOPL have signed a concession agreement  in June 2010.

However, RSOPL  representatives at their recent interaction with the MSRDC officials brought to their notice the minutes of the meeting chaired by the state deputy chief minister Ajit Pawar.

"At the meeting chaired by Pawar in August, whose minutes were finalised in October, it was decided that the portion of Steel Yard (equal to the size of Casting Yard), which is in the possession of MSRDC, should be given to BMC and in return BMC should give the land of Casting yard to MSRDC for the construction of WFSL.

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Mumbai is known for its traffic snarls.

"The swapping should be done within 8 days. However, BMC has turned down to do so." RSOPL team reiterated that the casting yard is a primary requirement for a marine construction where equipment are to be moved through sea on a permanent and temporary basis.

"On providing viability gap fund, it was decided that the decision would be taken in eight days on providing VGF by the state government to MSRDC through budgetary provisions which would be effective from March 2012 for a period of four years," RSOPL team noted.

Reliance Infrastructure spokesman said "We are keen for taking up the project. We are however, waiting to get the issues resolved."




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