Arbitrator for Monorail dispute over cost, delays

HC orders appointment of an arbitrator in the tussle between MMRDA, Scomi.

Arbitrator for Monorail dispute over cost, delays
Arbitrator for Monorail dispute over cost, delays

MUMBAI (Metro Rail News): The Bombay High Court on Friday ordered the appointment of an arbitrator to decide upon on the dispute between Mumbai Metropolitan Regional Development Authority (MMRDA) and the consortium comprising L&T and Scomi Engineering over the issue of cost escalation of the 20-km Monorail project between Chembur and Jacob Circle or Sat Rasta.

Since the project’s inception in 2007, its cost has gone up from the original estimate of around Rs 1,800 crore to Rs 3,000 crore. The L&T-Scomi are demanding an additional compensation of Rs 1,707 crore for cost overruns arising out of delays related to the right of way, environmental and other permissions, and rehabilitation of project affected persons (PAPs). However, MMRDA has been rejecting the claim, citing the inability of the contractor to complete the project on time despite repeated extensions.

The Bombay High Court Justice GS Kulkarni accepted L&T-Scomi’s application for appointment of the arbitrator and rejected MMRDA’s contention that L&T Scomi has not followed the proper process while demanding an appointment of the arbitrator.

The retired chief justice of Punjab and Haryana High Court, S J Vazifdar, will be the arbitrator from L&T-Scomi side, former Bombay High Court Justice VC Daga will be arbitrator from MMRDA and the HC will appoint the presiding arbitrator in due course.

The Monorail project has faced issues of cost overruns and delays since inception. It was awarded in 2007 and was to be started by 2010. In February 2014, a truncated 8.8-km service between Chembur and Wadala route was started. However, service on this stretch was also marred by constant breakdowns.

After a fire gutted an empty coach of monorail one morning in November 2017, the service was closed for around nine months. Earlier, at least five incidences were reported where services were disrupted for a period of one day to a week.

The second phase of the project was to start in 2017 but even after seven extensions, L&T-Scomi were not able to commission the entire line. In December 2018, MMRDA scrapped the contract with L&TScomi and took over the operations. The entire stretch between Chembur and Jacob Circle was finally thrown open to the public in March this year.

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