THE PUBLIC Accounts Committee (PAC) of the state legislature has rapped the Maharashtra government for not recovering dues and penalties totalling Rs 1,389 crore from the Mukesh Ambani-led Reliance Industries Limited (RIL) for delays in construction of a convention and exhibition centre and a commercial complex in Mumbai’s Bandra Kurla Complex (BKC).
The panel’s report in this regard was submitted to the state legislature on Thursday. The panel’s findings come three years after the Comptroller and Auditor General (CAG) of India had raised objections over the non-recovery.
The Mumbai Metropolitan Region Development Authority (MMRDA) had invited a Request for Proposal (RFP) in November 2005 for leasing a 75,000 sq m plot in the BKC’s G-block for development, operation and maintenance of Convention and Exhibition Centre (CEC) and Commercial Complex (CC).
Of this, about 55,000 sq m was allocated for the CEC, and 20,000 sq m for the CC. Accordingly, a CEC having a total built-up space of 65,000 sq m and a CC of 50,000 sq m was to be constructed.
While five bids were received, the rates offered by RIL for the CC component were found to be the highest at Rs 1,94,800 per sq m (against the reserve price of Rs 70,000 per sq m). In September 2006, the MMRDA executed a lease deed with RIL for 80 years on payment of lease premium of Rs1,104 crore. Subsequently, upon RIL’s request, MMRDA allotted (in March 2007) an additional built-up space totallting 72,500 sq m for both the CEC and CC for a payment of Rs 696 crore. As per the lease deed, the construction of the CEC and the CC was to be completed within four years.
The CAG had observed that the construction period was extended by the MMRDA from August 31, 2010 to January 29, 2015 due to a pending court matter. “Audit observed that though RIL could not complete the construction even by the extended date of January 29, 2015; yet an additional lease premium of Rs 180 crore for delay in construction up to one year was not recovered from RIL by MMRDA as of December 2015,” it had stated.
Agreeing with the CAG’s findings, the PAC report criticised the MMRDA for not even initiating the process of recovering the additional premium worth several crores from Reliance Industries until the CAG had objected to it. In its report, the PAC had accused the MMRDA of the being lax, and recommended strict action against errant officials.
Interestingly, on March 27, 2019, the Bombay High Court had directed the MMRDA to issued a NOC for a selling a portion of its premises. But the PAC had asked the MMRDA to challenge the order in the Supreme Court. “Implementing the HC’s decision in the current form would mean an injustice to other firms from whom additional premium has been recovered as per rules,” it had said.
While the RIL had earlier has submitted a bank guarantee of Rs 1,320 crore to the MMRDA, the PAC has insisted on the recovery of the amount. Incidentally, the PAC has also raised objections to the non-recovery of dues from Sterlite Industries for a plot allotted to them in BKC.