Maharashtra Chief Minister Prithviraj Chavan confirmed on Friday that Mumbai's Metro line 2 has been cancelled because of the 'Build-Own-Operate-Transfer' (BOT) model's failure in metro projects and because there are major disputes over Metro I project.

Prithviraj Chavan said:

"There are some disputes between the government and the developer Reliance Infra (R-Infra) in Metro 1 project too. The developer is asking for tariff hike so we are considering all options including taking over the metro project."

Reliance Infrastructure is asking for an increase in tariff and advertising rights etc. One option is to go into arbitration and the other is to negotiate, said Chavan. If it gets worse, we may think of even taking over the Metro project.

CM Chavan said:

"There has been a lot of talk of late about Mumbai's infrastructure projects getting delayed. The problems are multi-fold. The latest is that we have received no bids for the Rs 9800 crore Mumbai Trans Harbour Link (MTHL). This is mainly because of the economic slow down and the lack of confidence among private players.

Contracts for the future phases of Mumbai Metro will not be given out on a build-operate-transfer basis and therefore will have to follow the EPC model.