Sewri-Nhava Sheva Trans-Harbour Link: The story of unrealistic bidding and spiralling cost

In less than 10 years, the cost of Sewri-Nhava Sheva Trans Harbour Link has gone to about Rs10,000 crore from Rs4,000 crore. After some unrealistic bidding in the initial stages, at present not a single bidder is willing to submit a bid for the project that would reduce commuting time between Mumbai and Navi Mumbai

It has been 43 years since the Mumbai Trans-Harbour Link (MTHL) project was first proposed. The MTHL project also known as Sewri-Nhava Sheva Trans Harbour Link, a 22 km freeway grade road bridge was expected to reduce commuting time between Mumbai and Navi Mumbai and provide direct connectivity to Mumbai Port Trust (MPT), Jawaharlal Nehru Port Trust (JNPT) and the proposed Navi Mumbai international airport. Unfortunately, unrealistic bidding by consortiums, especially from both Mukesh and Anil Ambani led consortiums and objections raised by environmental activists as well as JNPT, have only doubled the cost over the years.

 

The first real attempt to make this project a reality was made in 2004, when IL&FS submitted a proposal to implement the project on a build, own, operate and transfer (BOOT) basis. State-run Maharashtra State Road Development Corporation (MSRDC) also submitted a counter proposal. Although the proposal by IL&FS was discussed by the government, it was side-lined for reasons best known to the authorities.
 

Then in 2005, MSRDC invited bids for the project. However, the process to receive bids and award the project went on till 2009. A consortium of Anil Dhirubhai Ambani Group

 

How the cost shot up
The cost of the MTHL has increased several times. In 2005, the cost of the project was estimated at Rs4,000 crore. The cost was revised to Rs6,000 crore in 2008. It was then increased to Rs8,800 crore in November 2011 and finally to Rs9,360 crore in August 2012.

In January 2013, the union government sanctioned Rs1,920 crore,  which is 20% of the project cost, in viability gap for the MTHL project. The State Government will also contribute the same amount while the winner is expected to pull in the rest. This also means, the cost of the project has not gone up to Rs9,600 crore, a whopping 240% from the estimated cost of Rs4,000 in just 10 years.

 

company Reliance Energy (REL) and Hyundai Engineering Construction Company quoted a concession period of nine years and 11 months against 75 years quoted by Mukesh Ambani's Sea King Infrastructure, the only other bidder left in the fray. Significantly, in 2004, the MSRDC taking into consideration the 30-year concession period for the Mumbai-Pune Expressway, had estimated a 35-year concession period for the Sewri-Nhava Sheva Trans Harbour Link project. At that time the cost of the project was estimated at Rs4,000 crore.

 

Interestingly, the REL-Hyundai consortium was disqualified at the technical bid stage as Hyundai did not meet the criteria of $200 million networth as per the bid documents. Even L&T Gammon Industries and IFFCO, the other bidders opted out of the race leaving Sea King as the only bidder, says a report from Business Standard.

 

However, according to the report, the REL-Hyundai consortium challenged the disqualification in court and got a favourable verdict from the Supreme Court. The apex court granted the consortium 90 days to submit its bid that ended on 15 December 2007, the report said.

 

Although the REL-Hyundai consortium won the bid, MSRDC itself was not sure about viability of such a low concession period. MSRDC then re-evaluated the winning bid through London-based Dar Consultants. Business Standard, in a report quoted, the then minister for public works and MSRDC chairman Anil Deshmukh as saying, “The concession periods demanded by both brothers seem to be unrealistic.”

 

Deshmukh also told Mumbai Mirror that both bids seemed frivolous in nature, and that a final decision would be taken based on the report submitted by the consultants to MSRDC.

 

Concessional period for a project is the time taken to complete the project, collect the toll to cover the cost, and then hand over the project to the government.

 

The state government then decided to invite fresh bids for the project in 2008. Although, the fresh round of bidding saw as many as 13 companies evince interest in the project, none submitted bids. At that time the cost of the project was revised to Rs6,000 crore.

 

Then in 2011, the Mumbai Metropolitan Region Development Authority (MMRDA) stepped into the scenario. In August, MMRDA appointed Arup Consultancy Engineers and KPMG to conduct the techno-economic feasibility of the Sewri-Nhava Sheva Trans Harbour Link. Again, the cost of the project was increased to Rs8,800 crore from original estimate of Rs4,000 crore.

 

In May 2012, the MMRDA shortlisted five consortia out of six that had expressed interest in the project. They are Cintra-SOMA-Srei, Gammon Infrastructure Projects -OHL, Concessions-GS Engineering, GMR Infrastructure-L&T -Samsung C&T Corp, IRB Infrastructure Developers-Hyundai, and Tata Realty and Infrastructure-Autostrade Indian Infrastructure Development Pvt Ltd-Vinci Concessions Development V Pte Ltd.

 

In the meantime, the cost of Sewri-Nhava Sheva Trans Harbour Link was again revised to Rs9,360 crore in August 2012.

 

On 22 October 2012, Maharashtra chief minister Prithviraj Chavan gave clearance to the project. Next day, the ministry of environment and forests (MoEF) gave a conditional environmental clearance to the sea link project. Some of the conditions were that the MMRDA should put up noise barriers, replant five times the number of mangroves destroyed, no dredging and reclamation, use construction equipment with exhaust silencers and work in consultation with the Bombay Natural History Society to minimize the impact on migratory birds.

 

October 2012 turned out to be an eventful month for the Sewri-Nhava Sheva Trans Harbour Link. Following the clearances from the state government and MoEF, on 31st October, the Department of Economic Affairs (DEA) also granted an in-principle approval for the MTHL. The DEA recommended granting Rs1,920 crore with a concession period of 35 years for the project.

 

On 9 November 2012, the state government issued a state-support agreement and a toll notification for the project. The empowered committee approved viability gap funding (VGF) for MTHL on 12 December 2012. Later on 18 January 2013, union finance minister P Chidambaram cleared the project. 

 

Although the MMRDA shortlisted five consortiums for the project, so far is has not received any bids. According a report in the Times of India, the state government has finally decided to construct the Mumbai Trans-Harbour Link on its own if it does not receive a bid on 5 August 2013.

 

Quoting UPS Madan, metropolitan commissioner, MMRDA, the report said, “...this time the government will not let the project fall for want of funds. If we do not receive any bids on August 5 then we shall go on our own”.

 

In January 2013, the union government sanctioned Rs1,920 crore,  which is 20% of the project cost, in viability gap for the MTHL project. The state government will also contribute the same amount while the winner is expected to pull in the rest.

 

This also means, the cost of the project has not gone up to Rs9,600 crore, a whopping 240% from the estimated cost of Rs4,000 in just 10 years. Unfortunately, it is the common people who will have to foot the bill either directly (through toll) or indirectly (through various taxes).

 

Like this story? Get our top stories by email.

User

COMMENTS

raghav uchil

5 years ago

It is same story all over again. Be it dams or trans harbour bridges or SEZ projects, cost escalation is the way forward to siphone off tax payers money. They have become hard skinned inspite of possible CBI enquiry later on.

Coal Bed Methane: A pipe dream at Mannargudi in Tamil Nadu?

In direct contrast to the speed at which private enterprise works, the Tamil Nadu government has suddenly decided to clamp down the work carried out by Great Eastern Energy Corporation in the state since 2010

There is always a big difference between private enterprise which is motivated by profit but that still serves peoples’ needs, as against political actions that show great concern for public reaction which may actually camouflage political motives and lethargy.

 

Take Reliance Industries’ (RIL) coal bed methane gas plant at Shogapur block in Madhya Pradesh.  RIL envisages a production of 3.5 mmscmd (million metric standard cubic metres of gas) of methane gas from 2015 and to show its seriousness, the company has even given a performance guarantee for Rs13 crore.  It expects to commission the plant by 2015. We should not be surprised, if RIL starts earlier, unless some stumbling blocks are created en route!

 

This 312 km pipeline will transport CBM from Shogapur in MP to Pulpur in UP, which has a designed capacity to carry 4.3 mmscmd.

 

The work is being carried out by Reliance Gas Transportation Infrastructure, a subsidiary of RIL, and necessary approvals have been obtained from the Petroleum and Natural Gas Regulatory Board (PNGRB).

 

Later on, should the situation warrant, this gas pipeline can be hooked into GAIL’s main trunk line.  As we can notice now, the work has been planned well in advance so that no time is lost when CBM is produced, which can be supplied to customers.  It would follow that the gas allocation will presumably come from the ministry.

 

In direct contrast to the speed at which private enterprise works, the Tamil Nadu government has suddenly decided to clamp down the work that has been going on since 2010 in the state, being carried out by Great Eastern Energy Corporation (GEECL).

 

GEECL is the first company in India to commercially produce natural gas from coal beds in West Bengal, which has drilled 150 wells so far, without any problems.

 

GEECL has received a licence to explore coal bed methane (CBM) in 691square km in Tanjore and Thiruvarur in Tamil Nadu. In 2011, the DMK led state government in Tamil Nadu issued a four year licence to GEECL and entered into an agreement, based on the production sharing agreement signed with the company by the central government.

 

Subsequently, as the work progressed, some farmers had expressed concern about ground water contamination, environment pollution, apart from water depletion in the area.

 

Although the ministry of environment and forests gave conditional clearance in September 2012, the present chief minister, Jayalalithaa, has now stopped the work till an expert committee, appointed by the Tamil Nadu government clears the same, and obtain the approval from the Tamil Nadu Pollution Control Board.

 

So, the work has come to a stand-still and the report of the expert committee is expected in 90 days.

 

The question is that this issue of exploring CBM has been going on since 2010, with various formalities and compliance of procedures must have been in place since then by GEECL.  Now, for the chief minister to claim that the farmers’ concerns have not been fully addressed is a late lame excuse?  Was not the Tamil Nadu Pollution Board aware of the licence issued by the previous DMK government? What was it doing since September 2012 when the MOEF gave GEECL conditional approval?  Conditional approvals are stumbling blocks that delay project work. What were they, anyway?

 

Did the Tamil Nadu government directly seek clarification from GEECL on the issues that it is asking now to clarify?  Or is the TN government raising these issues after so many years just because the project had received clearance from the previous government with which the present government is always at loggerheads?  If it raised the issue with GEECL, what was the contractor’s response?

 

Is it interested in the welfare of the people in the state or is it more concerned about the opposition party getting the benefit, should substantial CBM gas is struck in the area?

 

Of course, matters relating to farmers concerns need to be addressed and corrective steps taken to project the interest and environment, but success for obtaining such gas for the benefit of the power starved nation is just as important.

 

It would be in the interest of the public to know the actual position from both the Tamil Nadu government and the explorer, GEECL!

 

(AK Ramdas  has worked with the Engineering Export Promotion Council of the ministry of commerce and was associated with various committees of the Council. His international career took him to places like Beirut, Kuwait and Dubai at a time when these were small trading outposts; and later to the US.)

Like this story? Get our top stories by email.

User

COMMENTS

Siva Ranjani

2 years ago

Highly disappointed. We need a sustainable development. Already there's no water from rain source and Cauvery river source which was stopped by neighborhood states. This project will help a private company and not the state people. NO Government will focus on public's basic need of water. Please Let the people to live atleast with the ground water.

mohan

5 years ago

Because of this project the ground water will definitely go down alarmingly. This Mannargusi coal block area comes in the rich Cauvery river delta which is the rice bowl of Tamilnadu. This delta cannot survive if the ground water level goes down. The speed in which the clearances are given by the Central Government without due attention to the concerns raised at the public hearing conducted by the District Collector. The centre is not concerned abot the people or future generation. The centre is ready to destroy the rice bowl.

arul

5 years ago

please look the facepage cauvery basin to get more insights..

Ravi

5 years ago

This attitude of both the Dravidian parties - DMK and AIDMK to oppose any action, reform, development etc started by the opposite party in power is most absurd and condemn-able. It is absolutely silly to stop the development of the state with each party competing with the other to sabotage projects.When will this stop and Governments work for State's progress and not to score brownie points with each other?

REPLY

RAVI

In Reply to Ravi 5 years ago

This DMK government given a clearance just for money. Now farmers from Delta region started opposition to this matter. Agriculture is more important than those non sense Methane extraction project. People r not believing growth from those Gas extraction project. Non sense politicians still try to justify Methane extraction...koodankulam issue.....mullai periyar issue.... Fisherman problems.... Finally all tamil people r irritated to the extend.

Activists demand probe in matters associated with ex-CJI Altamas Kabir

Lucknow-based activists have prayed Chief Justice Sathasivam for an independent enquiry into various allegations associated with outgoing Chief Justice Altamas Kabir, including alleged leak of an order on medical entrance test passed on his last day


Lucknow-based activists, Dr Nutan Thakur and Asok Pande have demanded a probe by independent body into various allegations associated with outgoing Chief Justice Altamas Kabir. The allegations include, leakage of an order passed on his last day, allegations of not promoting Bhaskar Bhattacharya, former Chief Justice of Gujarat High Court for vested reasons and exerting undue pressure on Supreme Court Collegium to elevate a Judge to the Supreme Court.

 

In a letter sent to Chief Justice P Sathasivam, the activists said, at 8.36am on 18th July, Gopal Sankaranarayanan, a lawyer from the Supreme Court published an article 'Into the Darkness' on a website 'Bar and Bench'. The article stated, "In a little while, on his last day in office, the Chief Justice's court will deliver the much awaited judgment concerning the validity of the national medical entrance test to be conducted by the Medical Council of India. For the better part of the last week, senior counsel and junior advocates alike have without compunction shared a story that the appeals by the private colleges will be allowed with a declaration that the MCI has no jurisdiction, and that Justice Dave will dissent from this view. The judgment, it is confidently touted, runs into more than 190 pages and in excess of 300 paragraphs. It is my fervent hope that this tale is false - a figment of some perverse and destructive mind. In a few hours, we will know the truth."

 

On the same day at 11am, the three Judge bench including the then Chief Justice Altamas Kabir, Justice Vikramajit Sen and Justice AR Dave quashed the Medical Council of India’s (MCI) notification for holding common entrance tests for Bachelor of Medicine and Bachelor of Surgery (MBBS), Bachelor of dental surgery (BDS) and post-graduate medical courses.

 

Calling the pronouncement of almost same kind of judgement by the Bench headed by the ex-CJI, the activists have an independent enquiry preferably by Committee consisting of retired Chief Justice or Justice of Supreme Court, eminent advocate like Prashant Bhushan, Fali Nariman and social activist like Anna Hazare or Aruna Roy.

 

Dr Thakur and Mr Pande also cited articles from Times of India, Hindustan Times and Bar and Bench.

 

Here is what the report from the Hindustan Times, says...

"Meanwhile, CJI Kabir was caught unawares when informed that an article by SC advocate Gopal Sankaranarayanan - uploaded on a website two hours before the verdict - had leaked the judgment and even mentioned that Justice Dave's would be the dissenting vote. The article talked about "gossip" within court circles that the appeals by private colleges against the NEET would be allowed.  When questioned about the 'leak', Justice Kabir said he was surprised and shocked. "What can I say about it?" he said.  The outgoing CJI was on his way to his farewell party when media persons questioned him."

 

An article published by Times of India on 19th July titled "Collegium stalls outgoing CJI's attempt to push judge's appointment to SC" also talks about former CJI Kabir's meeting with the Collegium. It says...

 

In an unprecedented step, Chief Justice of India (CJI) Altamas Kabir had - a fortnight before his retirement - proposed before the Collegium of four senior-most Supreme Court Judges for recommending to the Centre to appoint a high court Chief Justice as Judge of the apex court. The CJI had on July 2 requisitioned a meeting of the Collegium comprising himself and justices P Sathasivam, GS Singhvi, RM Lodha and HL Dattu. Once they assembled, the Collegium members were told by the CJI about the proposal. But, the CJI was told that the President has signed the warrant of appointment designating justice Sathasivam as the next CJI and fixed July 19 for administering oath to him. Since, the warrant of appointment had come, it would be against precedents and tradition for the outgoing Chief Justice of India to push for appointment of Judges to the high courts or the Supreme Court.

 

Not convinced, Justice Kabir sought individual opinions of each member of the Collegium on the tradition and precedent thrown at him to stall his last proposal as the head of the judiciary. All four senior-most judges concurred that it would not be proper for the outgoing CJI to push for an appointment to the Supreme Court especially when his successor had been issued warrant of appointment. He was told that in the past, the outgoing Chief Justices had in fact requisitioned the meeting of Collegium but it was only to address an emergency, like an ad-hoc Judge's tenure in a high court coming to an end prior to the new CJI taking oath warranting extension or denial thereof. Unconvinced by the logic presented to scuttle his proposal, the CJI, it is learnt, flared up accusing the Collegium members of "ganging up" against him. With the overwhelming majority in the Collegium not favouring breaching the tradition and precedent, the CJI had no option but to drop his proposal.

 

Another article published on 12 July 2013 on the Bar and Bench site, claimed that Bhattacharya, former CJ of Gujarat HC alleged that the real reason for him not being denied a place in SC was opposition to elevation of (ex-CJI) Kabir's sister Shukla Kabir Sinha, to the Calcutta High Court.  

 

The activists requested CJI Sathasivam, to get all the facts mentioned in their petition enquired by a completely independent body and take all possible measures, including criminal and administrative measures on extremely critical issues raised in the petition as well as published in various news articles and as leveled by a person of the stature of acting Chief Justice of the Gujarat HC.

Like this story? Get our top stories by email.

User

COMMENTS

P M Ravindran

5 years ago

My concern is not just about the leak of the order but the very reason given by Altamas Kabir that a common entrance test would adversely affect minority rights! He has followed the foot steps of KG Balakrishnan in blatantly misusing his position and mocking at the citizens at large, thanks to the criminals who dominate our law making bodies!

REPLY

Ram Prasad Yadav

In Reply to P M Ravindran 5 years ago

His hastily judgement on medical entrance and bias comment on concept of reservation, both are hurting very much to the common people in India. they never forget it, shall never pardon to Mr. CJI Altamas Kabir.

yatinderk

5 years ago

If dignity of judiciary is to be maintained the CJI must order a thorough probe in the matter. Such issues put the judiciary in shadow of doubt.

DrMukesh Yadav

5 years ago

There is need for CBI probe in the matter to look for reasons and such a favoured decision at last hours of retirement.

Thomas Kuruvilla

5 years ago

I have been told that in Jan/Feb this year some doctors in Mumbai were already aware that the NEET would be scrapped & that money in hundreds of crores had exchanged hands with the private medical colleges having given this money. I came to know about this after the SC judgement on NEET was delivered a few days back.

REPLY

MOHAN

In Reply to Thomas Kuruvilla 5 years ago

This is a very serious allegation. Mr. Kuruvilla, are you the person who is known as "pavam payyan' in media circles in Kerala?

Thomas Kuruvilla

In Reply to MOHAN 5 years ago

No, Mohan. I'm not the one.

nagesh kini

5 years ago

The ex-CJI was after all a human like all of us with built in prejudices and bloated egos. Can't stand even right opposition. When his own sister's appointment was stalled he gets annoyed. Who is any one to question when he is still occupying the chair, irrespective of the Presidential warrant of appointment of the new CJI?
A clear case of Caesar's wife should be above suspicion!
So far the SC and our judiciary was the only constitutional authority to remain untainted.
This needs thorough investigation by a multi-disciplinary body of individuals not only from the bar and bench - a mych more wider - with dedicated civil society.

REPLY

Krishna Baalu

In Reply to nagesh kini 5 years ago

Mr NAGESH having said what has been said well said;but m scared of the so called civil society you mentioned at the end hmm dangerous I believe!

nagesh kini

In Reply to Krishna Baalu 5 years ago

Krishna you certainly should not stuff the committee with the members of the same tribe - law.
The civil society is a healthy mix of men and women from all walks of life,media journalists, accountants,doctors and engineers et al. Where else can you come across dedicated individuals? There may be some black sheep, you can't apply the same brush to one and all. There are good people too !

Suman Mukherjee

5 years ago

The question is why was the new Chief Justice of India, Mr.Palanisamy Sathasivam appointed by the UPA Government inspite of opposition from the outgoing CJ, Mr.Altamas Kabir?

Is it because of his caste? Or did he represent some backward (depressed) caste community?

What was the real reason for his appointment, will the UPA government please spell out...?

Also, can the Upper Caste (or Forward Caste or whatever you call this group) expect anything from the current UPA Government?

SuchindranathAiyerS

5 years ago

Chief Justices may come and Chief Justices may go but the sole lode star of Indian jursiprudence will remain "The Balance of Convenience". Ask Prashant Bhushan.

MOHAN

5 years ago

His judgement of scrapping of NEET was really shocking !!

We are listening!

Solve the equation and enter in the Captcha field.
  Loading...
Close

To continue


Please
Sign Up or Sign In
with

Email
Close

To continue


Please
Sign Up or Sign In
with

Email

BUY NOW

online financial advisory
Pathbreakers
Pathbreakers 1 & Pathbreakers 2 contain deep insights, unknown facts and captivating events in the life of 51 top achievers, in their own words.
online financia advisory
The Scam
24 Year Of The Scam: The Perennial Bestseller, reads like a Thriller!
Moneylife Online Magazine
Fiercely independent and pro-consumer information on personal finance
financial magazines online
Stockletters in 3 Flavours
Outstanding research that beats mutual funds year after year
financial magazines in india
MAS: Complete Online Financial Advisory
(Includes Moneylife Online Magazine)