June 14, 2025: MMOPL, a joint venture between Reliance Infrastructure (74%) and the Mumbai Metropolitan Region Development Authority (MMRDA, 26%), operates the 11-km Versova–Andheri–Ghatkopar metro line under a public–private partnership established in 2007. Originally budgeted at Rs 2,356 crore, the project was completed in 2014 at a final cost of Rs 4,321 crore. MMOPL maintains that the escalation was justified, while MMRDA contests the claim.
In August 2023, an arbitral tribunal awarded MMOPL Rs 992 crore, covering cost overruns, delayed viability-gap funding, and lifecycle expenses. With interest accruing until May 31 2025, the total claim now stands at Rs 1,169 crore.
MMRDA sought a stay under Section 34 of the Arbitration and Conciliation Act, citing inflated costs and a dissenting tribunal member. However, Justice Somasekhar Sundaresan clarified that under amended arbitration law, such a stay is not automatic. The High Court found no prima facie impropriety in the award and ordered MMRDA to deposit the entire sum by July 15 to qualify for a conditional stay.
The ruling highlights financial accountability in public–private infrastructure. While MMOPL plans to reduce its Rs 1,200 crore debt with the awarded sum, MMRDA argues the majority of cost escalations remain disputed. Legal and industry experts warn that delays in arbitration contribute to rising infrastructure costs due to accumulating interest and legal fees.
The judgement carries broader implications for PPP frameworks across Mumbai, where infrastructure investments exceed Rs 30,000 crore. With significant new undertakings—such as the Thane-Ghodbunder tunnel and coastal road—MMRDA may face intensified scrutiny and potential fiscal reallocation.
Reliance Infrastructure shares rose in response to the ruling, signalling investor optimism. However, analysts caution that lasting gains depend on the final outcome. The matter may now move to the Supreme Court, as both parties explore options for resolution and interim financing.
Source: Urban Acres
