French engineering firm Systra, which has played a key role in designing and overseeing Mumbai's metro construction, has accused senior officials of the Mumbai Metropolitan Region Development Authority (MMRDA) of corruption. The company alleges that officials sought 'undue favours', delayed payments and pressured them to inflate orders for contractors. The allegations also include stalling approvals for key staff and imposing arbitrary penalties, says a
report from Times of India (ToI).
The matter has escalated to diplomatic levels, with the French embassy intervening on behalf of Systra, the newspaper says, adding, "In a letter on 12 November 2024, the embassy urged Maharashtra's resident commissioner in Delhi, Rupinder Singh, to address the company's concerns. Systra claimed it has faced 'severe harassment and challenges' while serving as a general consultant on multiple MMRDA projects."
Maharashtra chief minister (CM) Devendra Fadnavis responded to the controversy, stating that the complaint had not yet reached him. However, he told ToI that transparency remained a priority and pledged to discuss the matter with chief secretary Sujata Saunik. "Transparency is at the core of our administration. We will ensure it is restored at any cost," Mr Fadnavis says.
In its official response, MMRDA dismissed Systra's claims as 'baseless' and 'a deliberate attempt to malign' the Authority and its personnel. According to MMRDA, an internal report submitted to the government found multiple contractual and regulatory violations by Systra, including cost overruns ranging from 4.27% to 10% in consultancy fees. The Authority has since issued a termination notice to Systra, citing security concerns and operational lapses.
According to ToI, Systra, which has worked on Metro Lines 5, 6, 7A, 9, 10, and 12, as well as detailed designs for lines 2A, 7 and associated depots, alleged that its difficulties began in August 2023, following leadership changes within MMRDA. The French company claims that MMRDA officials started exerting financial pressure under the pretext of demands from higher authorities. The company stated that it refused to comply with these 'favours'.
Between January and February 2024, MMRDA reportedly suspended payments to Systra, citing deficiencies in projects such as metro line 5 (Thane-Bhiwandi-Kalyan), Line 9 (Dahisar-Mira-Bhayander), Line 7A (Gundavli-Airport), and Line 6 (Lokhandwala-Vikhroli). Systra contends that many of these issues had already been resolved. While payments for some projects were resumed in June 2024, the freeze remains in place for Metro Lines 5, 9, and 7A (civil), with pending dues amounting to Rs30 crore, the newspaper says.
Additionally, the newspaper says Systra has accused MMRDA of attempting to coerce them into approving inflated orders for a contractor on metro line 9. "The company suggests that its refusal to comply has led to continued payment suspensions for certain projects. Furthermore, Systra claims that a similar approach is being taken against DB E&C, a German consultancy working on Metro Line 4, with which Systra partners on metro lines 10 and 12."
"Systra alleges that MMRDA has withheld payments even for projects where suspension notices were revoked. The company also accuses MMRDA of obstructing approvals for key staff, imposing unfair penalties, and demanding certifications for payments to minor contractors hired directly by the agency," ToI says.
With the dispute now in court, Systra's general manager for Mumbai, Arun Mishra, declined to comment, citing legal proceedings. Meanwhile, MMRDA insists that the issue is a commercial dispute and criticises Systra for attempting to escalate it to an international level. The matter now awaits further developments as both sides stand their ground, the report added.
MMRDA chief cannot be changed without the OK of the triumvirate, most likely Fadnavis had to initiate it.
Now a foreign firm, less liable to arm twisting, has exposed the chicanery.