State Government to Set Up Dispute Resolution Board
In the backdrop of recent shelving of some ambitious and high value infrastructure projects in Mumbai such as the Worli-Haji Ali sea link due to disputes between government bodies and private players, the state government has decided to set up a dispute resolution authority for infrastructure projects.
The conceived authority will be on the lines of other regulatory bodies for the telecom and power sectors as these kinds of problems are common to these sectors. The authority will function similar to these authorities to ensure successful tendering process as well as faster construction. Maharashtra chief minister Prithviraj Chauvan said that there were recent instances where disputes had arose after completing the tender procedures and signing contracts and the projects had to be shelved and the entire process had to be done all over again. This would be very tricky and time consuming.
The chief minister also said that there was a need to relook into the present system of bidding and the government would set up a conclave of conclave of industry experts in January to make necessary changes in order to attract investors. Officials said that the authority would help tackle and resolve conflicts arising from developers of projects those are in their advanced stages.
Major projects that were affected by disputes
1. Mumbai Trans-Harbour Link
The state government was unsuccessful in receiving any bids for the Rs. 10,000 crore Mumbai Trans-Harbour Link (MTHL) even after three attempts. Bids were first invited in 2005 by MSRDC. Reliance infrastructure, which was in the race, canceled its bid later. After two unsuccessful attempts, the project was handed over to MMRDA in 2009. However, the development body too failed in receiving any bids before deadline. One of the original five shortlisted companies announced that it would not bid for the project as it had not seen good returns from an earlier road development project even after two years.
2. Worli-Haji Ali sea link
Reliance infrastructure announced that it would exit the Rs. 4,500 crore Worli-Haji Ali sea link project after signing a contract in 2010, as there were many differences between its project consortium and MSRDC. There were conflicts over space non-availability for casting yard, amendments made to state support agreement, change in clause relating to viability gap funding and vacating mortgage on the Bandra-Worli sea link.
3. Mumbai metro Phase 2
Reliance Infrastructure which is currently executing the phase-1 of Mumbai metro line refused to work on phase-2 unless it received all clearances required for the project. The project is worth 5,000 crore. Reliance infrastructure quoted various reasons for its decision against working on the project. Some reasons were MMRDA’s failure to fulfill its obligations of right of way as per concession agreement and pending clearance from the airport authority as well as environmental clearance.
