State indecision delays Mumbai Metro-III, holds up Funds

MUMBAI: Indecisiveness on the part of the state government has upset the schedule of the Colaba-Bandra-SEEPZ Metro Corridor and held up funds from the Centre.

Also known as Metro III, the project may be delayed by at least a year because of dilly-dallying in the formation of a special purpose vehicle and appointment of the board of directors to execute the public transport project.

As these procedures are yet to be fulfilled, the Centre has withheld its share of Rs 160 crore for this financial year. Even the Japan International Cooperation Agency is willing to release funds, but is held back by lack of progress in the project.

The original date of completion for the Rs 23,136 crore project is December 2019.

The state urban development department headed by chief minister Prthiviraj Chavan is blamed for the mess by those familiar with the project processes.

The crux of the problem is the failure to sign a memorandum of understanding (MoU) that will transform the Mumbai Metro Rail Corporation (MMRC) into a 50:50 joint venture between the state government and the Centre; the joint-venture MMRC will then be the special purpose vehicle to execute the project.

The state is yet to approve the MoU for the joint venture even though the draft was sent on September 30.

“The special purpose vehicle has had neither a managing director nor a full-time board even though the Centre has already nominated its member on July 30,” an official said. “In this situation, bids can not be finalized or funds used.”

On September 16, the Mumbai Metropolitan Region Development Authority (MMRDA) had invited pre-qualification bids for detailed design and construction of underground stations and association tunnels. The process was supposed to be finalized by December so that it would be possible to invite bids by January.

The MMRDA has already extended the last date for submission of bid documents for this stage of the project twice.

“On November 29, the MMRDA extended the due date to accept bids to January 10 as the new board for MMRC has not been constituted,” the source said. “The deadline has already been extended by a year and more delays will cause cost overruns.”

A source said if things did not move fast, the project would get further delayed as a poll code would be imposed in February or March for polls scheduled in May.

Source said, “The project also has to received the approval of the state cabinet even though the note was sent on Aug 14. Without this, the state cannot release funds. Moreover, issues like acquisition of land and Relief and Rehabilitation cannot be handled effectively. Last heard, the cabinet note was with finance department and will later move to the legal department. At this pace, the project is likely to get further delayed.”


The funds could have helped start preparatory work by state of next financial year so that the work on the ground could have begun after monsoons in Oct 2014. However, the delay will disrupt the entire time table. Some officials said that government and MMRDA should learn from Delhi Metro Rail Corporation ( DMRC) model, which delivered almost all project on Schedule because the clock starts ticking as soon as the project is approved.