MUMBAI: French engineering giant Systra, which has designed and overseen the metro construction in Mumbai, has levelled allegations of corruption against senior officials of the planning agency, Mumbai Metropolitan Region Development Authority (MMRDA), accusing them of seeking “undue favours” and delaying payments. Complaints, which have been communicated to the govt, include pressuring the firm to inflate orders to contractors, stalling approvals for key staff and imposing arbitrary penalties.
Systra sought diplomatic intervention. In a letter dated Nov 12, 2024, the French embassy asked Rupinder Singh, resident commissioner of Maharashtra in Delhi, to intervene for the firm, which cited “severe harassment and challenges” while working as general consultant on MMRDA projects.
CM Devendra Fadnavis said the complaint had not reached him but he would speak to chief secretary Sujata Saunik. “Transparency is at the core of our administration. We will ensure it is restored at any cost,” Fadnavis told TOI.
In its response, MMRDA called the allegations “baseless” and “a deliberate attempt to malign” the reputation of the agency and its personnel.
Systra’s complaint routed through the embassy highlighted its record in executing rail and metro projects in India and said, “Since August 2023, Systra has been facing severe problems in its daily operations, escalating to the suspension of its payments due in January 2024.”
It requested that the matter be “studied in depth” and left it in the hands of the resident commissioner “to resolve the situation.” It said, “Systra is keen to work together with MMRDA for mutual benefit in an atmosphere of peace and cooperation, without external pressure.”
Systra said the trouble began in Aug 2023 following a leadership shake-up at MMRDA. As general consultant for Mumbai’s Metro lines 5, 6, 7A, 9, 10, and 12, and detailed design provider for lines 2A, 7, and associated depots, the company alleges that MMRDA officials began pressing for monetary benefits, which were thinly veiled as demands from higher-ups.
Systra claimed “favours” were sought on the pretext that the “MC (metropolitan commissioner)” was demanding it. Systra said it informed the authority that the company “shall not be able to do the same”.
Reacting to the allegations, MMRDA said a detailed report was sought from the department concerned and submitted to govt for consideration. The report revealed multiple contractual and regulatory violations by Systra, extending beyond the initial cost overruns of 4.27% to 10% in fees, it said.
MMRDA said it has issued a termination notice to Systra for various violations, including security concerns and operational lapses. “It is important to note that the present matter pertains to a commercial dispute,” it said. “Unfortunately, Systra appears to be attempting to escalate this into an issue between a foreign country and an agency of the government of Maharashtra, which is not an appropriate practice.”
Systra’s general manager for Mumbai, Arun Mishra, said, “We cannot comment as the matter is sub judice.” Systra has approached Bombay high court over the issue.
Between Jan and Feb 2024, Systra alleges that MMRDA issued payment suspension notices, citing supposed deficiencies in already-resolved issues on line 5 (Thane-Bhiwandi-Kalyan), 9 (Dahisar-Mira-Bhayander), 7A (Gundavli-Airport), and line 6 (Lokhandwala to Vikhroli). Additionally, MMRDA issued notices changing the scope of contractual work, alleging deficiencies in civil and systems contracts for line 10 (Gaimukh-Shivaji Chowk) and 12 (Kalyan-Taloja), issues that had already been resolved, it said.
Systra said the payment suspension was lifted for lines 6, 5, 9, and 7A (systems) in June 2024 following the company’s response. However, the freeze continues for lines 5, 9, and 7A (civil), with Rs 30 crore still unpaid. Systra also alleges MMRDA attempted to pressure the firm into approving inflated orders for a contractor on line 9. It said, “Since we are not obliging… we believe MMRDA is continuing the suspension of payments for general consultant services for lines 5, 9, and 7A (civil). From what we understand, MMRDA is taking further steps to terminate the general consultant services for these contracts.”
It claims similar pressure tactics are being applied to DB E&C, a German consultancy handling the general consultant contract for line 4. Systra and DB E&C are consortium partners for lines 10 and 12. Systra said MMRDA has stopped making payments on these projects, including the ones where suspension notices were revoked. Compounding the issue, Systra says MMRDA has stalled approvals for key staff, imposed arbitrary penalties, and demanded certifications for payments to minor contractors hired directly by the agency.
