The Maharashtra government, though the Mumbai Metropolitan Region Development Authority (MMRDA), has announced plans to re-tender the Mumbai Metro Line II PPP project.

This announcement comes after Reliance Infrastructure formally terminated its agreement with the government. According to the firm, it has terminated the agreement due to a failure of the Government of Maharashtra to fulfil its obligations. The firm has also asked for the refund of the Rs.1.6 billion bank guarantee.

Reliance Infra reported:

Due to non-fulfilment of various critical obligations, by the state government and the MMRDA, the project could not take off. Even after four years and despite the best efforts by the state government, various project impediments could not be resolved.

The Government of Maharashtra and the concessionaire signed the termination agreement at no cost and no claims to either party.

The state government through an international competitive bidding had awarded Mumbai metro project to the SPV called Mumbai Metro Transport Private Limited (MMTPL) on August 3, 2009. MMTPL was a consortium formed by Reliance Infrastructure, SNC Lavalin Inc Canada, and Reliance Communication. The concession agreement was signed on 21 January 201o.

The Line II project would connect the western suburbs to northeast Mumbai. The 31.87 km metro project would involve the development of 27 stations.

The total project investment is estimated at Rs120 billion (US$1.94 billion).

After working with its consultant RITES, the MMRDA has decided to change the entire layout of the metro project. According to sources, the MMRDA will be seeking approval for the new plan from the Maharashtra government anytime soon after the MMRDA's next board meeting, schedueled to be held on 20 November. 

According to local sources the new metro line will be now 40 km long and the total project investment is now estimated at around US$4.7 billion.