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> The Mumbai Sea-Link project saga – III |
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The Mumbai Sea-Link project saga – III
posted by
Vivek Sharma
17 Jun 2008, 20:37
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labels: government, infrastructure, companies
When the Maharashtra government became ‘concerned’ about the very short concession period quoted for the Mumbai Sea Link project by the winning bidder – a consortium led by Reliance Infrastructure of the Anil Ambani group – many eyebrows were raised. Why should the government be worried if the consortium is willing to – and has the ability to – complete the project and pay its financial obligations to the government under the concession agreement?
Instead of formalising the project agreement with the winning bidder, the government promptly asked a foreign consultant to study the two bids that were considered in the final round. While the Reliance Infra consortium asked for a concession period of less than 10 years, the second bidder – a consortium of companies said to be controlled by Mukesh Ambani – quoted 75 years. The consultant is reported to have commented that both the bids are ‘worth considering’ – even though the difference in concession periods is 65 years!
If seeking the opinion from the consultant was done, as many allege, to purposefully delay the contract finalisation and allow the bidder to wriggle out of a clearly unprofitable venture, it has served the purpose. Reliance Infra reportedly told a business newspaper last week that it is pulling out of the project. Not because the company has realised that it is unprofitable, but because it is not sure whether they are getting the project or not. Can’t blame them!
The state government is shortly expected to consider other options – including a re-tender which will delay the project by many more years.
Meanwhile, China opened the world’s longest sea bridge last month. The 36-km long bridge connecting Shanghai to another city across the Hangzhou Bay was built in 5 years at a cost of $1.4 billion, in a public-private partnership.
And Mumbai continues to dream about the sea bridge first proposed by JRD Tata, many decades ago!
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