SC Accepts MMRDA's Decision To Scrap Two Infra Project Tenders Worth Rs 14k Crore

New Delhi: The Supreme Court on Friday accepted the decision of the Mumbai Metropolitan Region Development Authority's (MMRDA) to scrap the entire tender process for two high-value infrastructure projects worth Rs 14,000 crore.

The matter came up before a three-judge bench led by Chief Justice of India B R Gavai. CJI Gavai said if the court would have to go into the merits of the case, then it would consider the validity of that clause and everything.

“We are basically concerned with larger public interest…we are in an era of transparency”, said the CJI. Senior advocate Mukul Rohatgi, representing the MMRDA, requested the bench to record his statement that his client will scrap both the tenders. “The state has decided to scrap the entire tender process in the larger public interest….in that view of the matter the petition is rendered infructuous", said the CJI.

The apex court disposed of Larsen & Toubro’s (L&T) appeal as 'infructuous', bringing relief to the company, which challenged the process following concerns over lack of transparency.

In the previous two hearings, the top court had expressed its discontent with the tender process and asked MMRDA whether it was willing to retender the projects. On May 26, the apex court hinted that if it failed to retender the projects then it would put on hold the tender process.

The order passed today by the apex court means that the existing bids, including L&T’s, stand void, and there is a possibility of re-initiation of the tender process by the MMRDA. The apex court’s order provides a new opportunity for L&T to make fresh bids. Senior advocates A M Singhvi and Ranjit Kumar represented L&T before the apex court. The MMRDA was represented by Solicitor General Tushar Mehta and senior advocate Mukul Rohatgi.

On Thursday, the MMRDA informed the top court that there were substantial grounds for rejecting the technical bid of Larsen and Toubro (L&T) for the proposed Rs 6,000-crore Mumbai Elevated Road Project and the Rs 8,000-crore Road Tunnel Project.

During Thursday's hearing, the CJI raised the question of L&T being chosen for the Central Vista project and, agreeing to consider the reasons for rejection of technical bid of L&T. He added, "We have not heard you on the merit the state government wants….Rs 3,100 crore is not a small amount, it is public (money). The question is the person, who is building Central Vista?"

Before the CJI could complete the observation in the matter, senior advocate Kapil Sibal, appearing for L&T, said his client has enormous credentials.

Megha Engineering and Infrastructure Limited is the successful L1 bidder for the project. L&T had contended that the arbitrary and non-transparent manner of carrying out the tender process had resulted in the declaration of the L1 bid for both projects to Megha Engineering & Infrastructure Ltd. at a substantially higher project cost.

Rohatgi, also appearing for MMRDA, said, "We have not shown your lordships the reasons. If your lordships were to see the reasons." The CJI replied that the court will consider the reasons. Mehta requested the bench to hear the matter on Friday and, regarding Rohatgi's submissions, said, "The only thing my learned senior wants to convey is that the disqualification is not on any flimsy or fanciful grounds. There are substantial grounds.”

"We have examined the reports. Our problem is that the tender says we cannot disclose," he said, indicating the tender conditions, which restrain the MMRDA from disclosing the reasons for disqualifying a bidder till the contract is awarded. "We will consider it…at some point in time, you may be required to refer the judgment to a larger bench…this is an era of transparency," the CJI said. "I do not think we are travelling in that direction. Your lordships may have it tomorrow (Friday)," Mehta replied.

The Elevated Road Project envisages a 9.8-km bridge passing along the Vasai Creek, and part of an extension of the Mumbai Coastal Road Project involving the construction of around a 15 km stretch of road from Gaimukh in Thane to Bhayander.

The road tunnel project is for the design and construction of an underground tunnel from Gaimukh to Fountain Hotel Junction on Thane-Ghodbunder Road. It envisages five-km twin tunnels of a finished diameter of 14.6 m. L&T, before the Bombay High Court, had initially challenged the MMRDA's decision to proceed with the opening of the price bids without the presence of L&T, and without communication of any disqualification to it. The high court did not entertain L&T's plea, following which it moved before the apex court.