Moneylife: Mumbai: Wednesday: June 11, 2025.
The Bombay High Court (HC) on Tuesday directed the Mumbai Metropolitan Region Development Authority (MMRDA) to pay Rs1,169 crore to Mumbai Metro One Pvt Ltd (MMOPL), a subsidiary of Reliance Infrastructure Ltd, as part of an arbitration award. The court instructed MMRDA to deposit the full amount with its registry by 15 July 2025.
MMOPL, which operates Mumbai’s first metro corridor between Versova, Andheri and Ghatkopar, has stated that the funds will be utilised to reduce its outstanding debt.
The court’s directive follows a long-running arbitration dispute between MMOPL and MMRDA. In August 2023, a three-member arbitral tribunal had awarded Rs992 crore to MMOPL in compensation for cost escalations and other contractual disputes related to the metro project. With interest, the total sum now stands at Rs1,169 crore.
MMRDA had contested the award and moved the HC under Section 34 of the Arbitration and Conciliation Act, 1996, seeking to set it aside. However, the court declined to grant an unconditional stay on the arbitral award and ruled in favour of MMOPL.
In its observations, the HC held that MMRDA had not made out a sufficient case to warrant an unconditional stay on the execution of the award.
The dispute pertains to cost escalations in the development of the Versova–Andheri–Ghatkopar metro line. As per data from MMRDA’s official website, the estimated cost of the project at inception was Rs2,356 crore, which later rose to Rs4,321 crore.
Mumbai Metro One is a public-private partnership between Reliance Infrastructure, which holds a 74% stake, and MMRDA, which holds the remaining 26%.
Information obtained under the Right to Information (RTI) Act by former central information commission Shailesh Gandhi, shows that in the Mumbai Metro One project, the Maharashtra government gave Rs650 crore as 'viability gap funding', land worth about Rs600 crore and Rs132 crore as equity. Thus, the total amount given by the state government was about Rs1,382 crore, plus monopoly rights.
"Reliance Infra contributed only Rs380 crore as equity. The rest came as loans mainly from public sector banks (PSBs). Yet the equity share of Reliance Infra is 74% and 26% for the government," Mr Gandhi wrote in a Moneylife article in October 2018.
He says RInfra got the right to make and operate the Mumbai Metro One after competitive bidding. "RInfra had committed that the project cost would be Rs2,356 crore and it would be completed within 60 months. It actually took 83 months and the Company claimed that the project cost had gone up to Rs4,321 crore, an increase of 83.4%!"