The fate of the Rs 5,000-crore Worli-Haji Ali sea link now lies with the Maharashtra government.
A joint technical committee had last week strongly recommended construction of a coastal road between south and north Mumbai. The Rs 9,000-crore coastal road can make a Worli-Haji Ali sea link redundant.
The government is yet to accept the recommendations of the technical committee, which has weighed options of a coastal road on reclaimed land, on stilts and sea links.
The Maharashtra State Road Development Corporation (MSRDC) and Reliance Infrastructure, which bagged the sea link project in February 2010, are continuing their talks to sort out procedural issues. These talks are mediated by a retired judge of the Supreme Court.
MSRDC vice-chairman and managing director Bipin Shrimali told Business Standard: “The ongoing talks are positive. It is not an arbitration but a mediation process. We hope Reliance Infrastructure will complete the necessary process of financial closure within a month.”
He said the state government had not decided on the coastal road proposal. “As of now, the Worli-Haji Ali sea link is still on,” he said.
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Reliance Sea Link One Pvt Ltd (RSOPL) – a joint venture between the Anil Dhirubhai Ambani group’s Reliance Infrastructure and Hyundai Engineering — is also awaiting the state government’s decision on the sea link project.
A Reliance Infrastructure spokesperson said: “We are keen on the project and we are hopeful that MSRDC will sort out all the issues at the earliest, so that we can commence the project.” The company has not received any communication from the state government or MSRDC on the coastal road project, he added. The project work is yet to begin though the concession agreement between MSRDC and RSOPL was executed on June 26, 2010.
RSOPL continues to demand that jetty and casting yard be made available to them for the implementation of the project. However, MSRDC has clarified that this was not a part of the concession agreement. It also said the Mumbai municipal commissioner has turned down request for casting yard space to MSRDC.
Further, MSRDC and RSOPL differ over providing the viability gap funding of Rs 1,392 crore. Instead of the state government, now MSRDC would provide the VGF. However, RSOPL has refused to accept the assurance from MSRDC in this regard being cash strapped.
Moreover, RSOPL has objected to the revision in critical clauses from the State Support Agreement relating to the government guarantee. The company has been reiterating its demand that MSRDC’s no-objection certificate from its lenders was necessary as MSRDC has mortgaged the Bandra-Worli sea link for raising finance. In the absence of a no-objection certificate, RSOPL’s lenders have refused to give the loan. According to the contract, RSOPL would take over Bandra-Worli sea link project by paying Rs 1,634 crore to MSRDC and develop the sea link connecting the Worli-Haji Ali.
MSRDC has already invoked clause pertaining to the imposition of penalty for lack of financial closure by RSOPL since July 3 last year.
RSOPL has brought to notice of both the state government and MSRDC that it has completed a detailed geo-technical studies. Besides, it has shortlisted Hyundai, L&T, HCC and Shanghai Construction, China for undertaking construction. BRISA, Portugal has been appointed and is on hold since May 2011 to undertake tolling of Bandra-Worli Sea Link project.
PROJECT WATCH
*Maharashtra cabinet approved Wroli-Haji Ali project, RSOPL awarded concession for 40 years on February 26, 2010
*Final environment clearance received from MoEF on January 4, 2011
*Coastal road plan unveiled by state government on February 15, 2011
*RSOPL received sanction letter from ICICI Bank for Rs 2,000 crore loan, submitted financial documents to Msrdc to go ahead on March 15, 2011
*Dispute arose between Msrdc and RSOPL in September 2011
*MSRDC and RSOPL appointed Retd Justice B P Singh as a mediator in November 2011
*Joint Technical Committee submitted the Coast Road report to Govt of Maharashtra on January 19, 2011