Mumbai Elevated Rail Corridor project: State Govt raises fresh objections

New Delhi: The Maharashtra government has raised fresh objections to the state support agreement for the much-delayed Rs 20,000-crore Mumbai elevated rail corridor project, which is part of the prime minister’s 1 lakh-crore stalled infrastructure projects that are being fast tracked. “The state government has sent its objections, backed by its counsel’s opinions, to the railways ministry,” said an official, explaining that the state government was not comfortable with the idea that the private project developer, or the concessionaire, should be a deemed party to the agreement and that it should be between the Centre and the state.

The state government’s objections to the conditions, some of which had previously been agreed to and are part of a public-private partnership (PPP) contract, pose a fresh hurdle in the agreement that the Prime Minister’s Office had last December said would be signed in a fortnight so that bids for the project could be opened before the 2013 Rail Budget. Later, in July this year, the PMO set January 2014 as the deadline for the award of the project.

Maharashtra chief minister Prithviraj Chavan is scheduled to meet railways and Planning Commission officials on November 13 to resolve the issue. Prime Minister Manmohan Singh, on Monday, will review the progress of the projects, including two locomotive factories in Bihar, which have been chosen to be fast tracked.

The state government is also opposed to the idea that the developer or the operator should have the right to seek specific performance from the state government, said the official, who did not wish to be named.

Besides, the state has not agreed to the railways’ condition that to protect the viability of the project no new local tax, toll or charge can be imposed on the rail system.

It has also said the clause waiving off sovereign immunity should not exist even though, officials explained, this clause is a well-established practice in PPP contracts where a state is involved in a commercial venture.

In August, the Maharashtra government and Indian Railways had reached a broad agreement on most issues holding up the agreement, which is critical to the 60-km Churchgate-Virar elevated rail corridor project. It had agreed ‘in-principle’ to give enhanced floor space index (FSI), the commercial space or real estate that can be developed from the land allotted to the developer, but a ‘firm commitment’ is yet to come through. A higher FSI will mean increased space to develop real estate, which will make the project more attractive to potential investors.

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