Mumbai Metropolitan Region Development Authority sacks Monorail operators LTSE

The Mumbai Metropolitan Region Development Authority (MMRDA) terminated Larsen & Toubro and Malaysian Scomi Engineering's (LTSE) contract on Friday for running the monorail. The reasons given were a failure in performing and fulfilling contractual obligations.

Construction of the Monorail project commenced in 2008, and while L&T was appointed the civil construction contractor, Malaysian Scomi Engineering was in-charge of manufacturing trains and operations since 2014. MMRDA will now oversee operations alone. Four out of 10 monorail trains are currently operational, ferrying 12,000 people daily.

The decision will not affect Phase-1's run between Chembur and Wadala as MMRDA will hire 198 operations and maintenance personnel from an external agency. Vacancies in housekeeping, security and others positions will also be filled in a similar manner.

"Despite giving (them) many chances, all contractual obligations were not fulfilled," said an MMRDA official about the reasons behind discontinuation of the contract, "Non-functional trains were not repaired."

In its termination letter, MMRDA cited 'persistently disregard of instructions', 'failure to commence the second phase of Monorail' and 'failure to supply balance five trains as promised in the contract' as some of the reasons behind its decision. It mentions that MMRDA granted seven extensions to LTSE and hence found no further grounds for granting further favours. MMRDA has not been able to service the full route between Chembur and Jacob Circle due to lack of trains.

"You had consistently failed to make good the contractual failures and to remedy them within the contractually stipulated time period," the notice reads, adding "You have failed to rectify any contractual material defaults and even failed to proceed to make good such defaults."

The second phase of the Monorail – between Wadala and Jacob Circle – is expected to start in the next four months after MMRDA procures spare parts for non-functional trains. The body asserts the decision is in public interest and that this will enable it to encash the balance Rs 200 crore bank guarantee paid towards LTSE. Earlier, MMRDA had similarly encashed around Rs 60 crore.

Ever since operations began in February 2014, the project has seen frequent breakdowns and mishaps, interrupting services. It also came under the scanner of the Comptroller Auditor and General of India (CAG) over irregularities.

Despite repeated attempts, LTSE did not comment on the termination of the contract.