MSRDC may return RInfra money to end new sea-link contract

The Maharashtra State Road Development Corporation (MSRDC) is willing to return the R100 crore paid by Reliance Infrastructure as an earnest amount towards contract for building the Worli-Haji Ali Sea Link, a senior official in MSRDC told FE.

The state-run authority has sent a proposal to the Maharashtra government for scrapping the contract. At a board meeting held on Thursday, MSRDC decided to submit a proposal to the government seeking termination of the contract with RInfra for the Worli-Haji Ali Sea Link.

According to sources, MSRDC is contemplating on going ahead with the project on its own, for which the contract with RInfra has to be ended.

"MSRDC has relied on the recommendations of the arbitrator, retired Justice BP Singh, and attorney general of India GE Vahanvati," said the official in a response as to why the contract is being cancelled. "We have forwarded their stand to scrap the contract with RInfra to the state government. The cabinet committee on infrastructure will now take the final call on the matter," he added. RInfra refused to comment on the matter. The MSRDC official said after the final decision of the cabinet committee, the decision will be communicated to RInfra.

Apart from the R100 crore, RInfra has also invested R120 crore towards design, geo-technical survey of the locations around the construction site and hiring contractors for the project, which, according to the concession agreement, the MSRDC or the government are not liable to pay, say sources.

Last month, retired Justice BP Singh, acting as a mediator between the government and RInfra, had submitted a report saying that the company should be allowed an exit from the contract. More recently, attorney general GE Vahanvati had sent a letter to MSRDC recommending an amicable termination of the agreement with Reliance without any monetary liability on either side.

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