Mumbai: The agency responsible for infrastructure development in the Mumbai Metropolitan Region is embroiled in a slugfest with France’s Systra Group—a consultant working on multiple Metro lines here. It started with the agency issuing a suspension of payments notice, followed by a contract termination order, and the consultant making allegations of graft in a letter routed through the French Embassy.
Amid the tussle, the Bombay High Court Tuesday quashed Mumbai Metropolitan Region Development Authority’s (MMRDA) notice to terminate a contract with the Indian arm of Systra for work to be done on three Metro lines as a consultant, calling the move “arbitrary and unfair”.
MMRDA’s contract termination letter dated 3 January, 2025, the high court said, “did not assign any reason for the discontinuation”.
It also asked the MMRDA to consider the fate of the contract afresh after giving Systra a hearing.
In February 2024, the MMRDA had issued suspension of payments notices to Systra for Mumbai Metro-related work it was tasked with. In November that year, the company, according to a report by Times of India, wrote a letter routed through the French Embassy to the resident commissioner of Maharashtra in Delhi, making graft allegations against the MMRDA. In the letter Systra accused the MMRDA of undue pressures and delaying payments.
The MMRDA issued a 28-page statement Tuesday, responding to Systra’s allegations point-by-point, while stating that the letter was “unsigned” and the French Embassy merely forwarded it to the resident commissioner without any comment on its authenticity or any endorsement.
In its statement, the MMRDA also questioned the timing of the graft allegations, saying the letter was sent only after suspension of payments notices were served to Systra. “Notably, no such allegations were ever raised before any official forum prior to these notices,” the agency said.
ThePrint reached Systra for comment via email but had not received a response by the time of publication. This report will be updated if and when a response is received.
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What is Systra-MMRDA feud
Systra has been working with the MMRDA on multiple projects, providing general consultancy services for Mumbai Metro lines 5, 9 and 7A for the civil work and a separate contract for these lines for the technological systems works; besides general consultancy services for the systems work of Line 6, and general consultancy services for the civil works of lines 10 and 12.
It has also been associated with the MMRDA for detailed design consultancy services for Metro lines 2, 4 and 7, and for drafting branding guidelines for all Metro lines of MMRDA.
The termination order issued in January, which the MMRDA has now quashed, was for the general consultancy for the civil works for Metro lines 5, 9 and 7A.
According to MMRDA’s 28-page statement, Systra had alleged that MMRDA officials started harassing the company from August 2023 after a leadership change in the MMRDA. It alleged that officials summoned the company to ask for undue favours in return of monetary benefits.
The company also alleged that MMRDA issued a notice of suspension of payments in January and February 2024 for certain contracts alleging deficiencies of “old issues which were already closed”. It said that it had responded to all suspension notices by MMRDA and highlighted the constraints caused by MMRDA that hindered the consultant’s work.
The MMRDA has dismissed the allegations as “baseless” and a “deliberate attempt to malign the reputation of MMRDA”.
It also said that the MMRDA management held a formal meeting with Systra CEO Pierre Verzat and Systra India MD Hari Somalraju, and no grievances or complaints as listed out in the letter were discussed.
The MMRDA said that in June 2023, it observed a cost overrun to the extent of 4.72 percent of the fee initially quoted, and conducted an inquiry that revealed multiple violations, including violations of labour laws.
“Additionally, breaches of the confidentiality provisions of the contract, unauthorised secondment arrangements by Systra and possible security breaches involving sensitive Metro-related information being accessed by unauthorised individuals or organisations were identified,” the MMRDA said in its statement. It also listed the names and designations of Systra employees who were allegedly being underpaid. The MMRDA also alleged that there were unauthorised third-party personnel being engaged at Metro sites in 2023, besides lapses in safety protocol which resulted in the death of an operator of a transit mixer in an accident in December 2024.
Systra, on the other hand, said MMRDA in its 28-page statement said it withdrew notices of suspension of payments for the systems works contract for Line 6 and systems works contract for lines 5, 9 and 7A.
But it did not revoke suspension of payments notice issued for the civil works consultancy contract for lines 5,9 and 7A. Systra also alleged MMRDA did not revoke this particular order because Systra refused to recommend an inflated order of one of the contractors working on Line 9.
To this, the MMRDA said it revoked the suspension of payments order for certain contracts, as Systra acknowledged breaches and submitted remedial action plans. Further, it said it revoked suspension of payments notices for contracts that were at the tendering stage and not the execution stage.
Civil work on lines 5, 9 and 7A is already in an advanced execution stage “where the suspension notices were not revoked as the circumstances did not warrant such action”.
What Bombay HC observed
Bombay High Court set aside MMRDA’s termination order for the consultancy contract of civil works on Line 5 (Thane-Bhiwandi-Kalyan), Line 7A (Andheri East-Chhatrapati Shivaji International airport), and Line 9 (Dahisar to Mira Bhayander), saying MMRDA had not assigned any reasons.
“The contention that since the MMRDA has acted in exercise of rights available to it under the contract and therefore the petitioner should be relegated to the remedy of arbitration, does not deserve acceptance, as we find that the action of the MMRDA in discontinuing the consultancy services provided to the petitioner is arbitrary and unfair,” said the court.
The court, however, refrained from getting into the merits of the contract obligations, and directed the MMRDA to take a fresh decision on the contract awarded to Systra MVA Consulting India Private Limited (SMCIPL) after hearing out the company.
“…it is not necessary for us to examine the nature of contract and whether it is determinable in nature. We are not inclined to grant the relief of specific performance of agreement in this writ petition,” the order said.
Reacting to the order, MMRDA said it “reinforces MMRDA’s procedural integrity and its rightful discretion in the matter”.
According to the court order, the general consultancy contract for civil work of lines 5, 7A and 9 was awarded by MMRDA to a consortium of Systra-SMCIPL in 2020 and is worth Rs 90.76 crore. MMRDA gave a letter of acceptance in May 2021 and, per the initial terms, the contract was valid till 30 November, 2024 but was later extended up to 31 December, 2026.
An MMRDA source said the dispute has not hampered Metro work.
Other than the MMRDA projects, Systra, according to its website, has also worked on the city’s first underground Metro corridor, implemented by the Mumbai Metro Rail Corporation, as a detailed design provider for one of the packages. It has also worked on the Mumbai Coastal Road project that was implemented by the Brihanmumbai Municipal Corporation (BMC).
(Edited by Amrtansh Arora)
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