The Mumbai Metropolitan Region Development Authority (MMRDA) has rejected Larsen and Toubro’s (L&T) technical bids for two major infrastructure projects in Mumbai — the Rs 6,000 crore Elevated Road Project and the Rs 8,000 crore Road Tunnel Project. On Monday, the Supreme Court asked the MMRDA to consider re-tendering. If not, the court warned it could stay the entire process.
The matter will be heard again on May 29. Until then, the bidding process remains under scrutiny.
L&T says its bids were over Rs 3,100 crore lower than selected firm
L&T, which was earlier selected to execute the Central Vista project in Delhi, had approached the Supreme Court after the Bombay High Court on May 20 upheld MMRDA’s decision.
The main issue raised by L&T was that its disqualification was not communicated and the price bid was not even opened. L&T claimed that this lack of transparency led to a higher bid being selected.
According to L&T’s counsel, Senior Advocate Abhishek Manu Singhvi, the company’s bids were significantly lower than the current L1 bidder Megha Engineering & Infrastructure Ltd. He said L&T’s offer for the Road Tunnel Project was Rs 2,521 crore less, and for the Elevated Road Project, it was Rs 609 crore less. Singhvi argued that public money was at stake and the rejection of a lower bid without explanation raised serious concerns.
CJI questions L&T disqualification, cites transparency concerns
Chief Justice of India BR Gavai, who headed the two-judge bench, said it was hard to believe that a company like L&T, chosen for the Central Vista project, was technically unfit for the Mumbai projects. He added, “We are in an era of transparency… If it’s arbitrary, the person should have an opportunity to challenge.”
The bench, which also included Justice AG Masih, asked MMRDA to take instructions on whether they would re-tender the projects. “Otherwise, we will stay the process,” said CJI Gavai.
MMRDA says disqualification reasons need not be shared before awarding the project
Solicitor General Tushar Mehta and Senior Advocate Mukul Rohatgi appeared for MMRDA and defended the disqualification. They said there were valid reasons, which could be shown to the court. Rohatgi argued that if a company is disqualified, the price does not matter.
They also referred to a 2022 Supreme Court order which upheld similar tender conditions allowing disqualification reasons to be shared after the contract is awarded. However, Singhvi said that order was about foreign-funded projects and does not apply here.
What are the projects about?
The Mumbai Elevated Road Project involves building a 9.8 km-long bridge along the Vasai Creek, forming part of the extended Mumbai Coastal Road and a larger MMRDA road network from Gaimukh in Thane to Bhayander.
The Road Tunnel Project includes constructing a 5-km underground twin tunnel from Gaimukh to Fountain Hotel Junction on Thane Ghodbunder Road. The tunnels, with a diameter of 14.6 metres, are part of the same expansion plan. The estimated cost is around Rs 8,000 crore.