Why MMRDA has scrapped the tendering process for Thane-Bhayandar mega infra projects
The Bench was hearing a challenge by Larsen & Toubro (L&T) Ltd to orders passed by the Bombay High Court on May 20 upholding MMRDA's position that the reasons for rejecting the technical bids need not be communicated to the company before the projects are awarded.
The top court had on Thursday (May 29) asked Mumbai's infrastructure development authority whether it was willing to carry out a re-tendering process for the two major projects in the financial capital – and warned that failure to do so might lead the court to stay the current tenders.
A Bench comprising Chief Justice of India (CJI) B R Gavai and Justice A G Masih had asked this question to Mumbai Metropolitan Region Development Authority (MMRDA) first on May 26.
On Friday, taking MMRDA's statement on the record, the SC disposed of as 'infructuous' the pleas by L&T.
What is the background of this major development, and how did the matter reach the Supreme Court?
What are these two infrastructure projects?
The two projects will link Thane with Mira-Bhayandar. They are part of an extension of the Mumbai Coastal Road project.
The first project is a 5-km twin tunnel of 14.6-metre diameter, connecting Gaimukh near the mouth of Vasai Creek in Mira-Bhayandar to the Fountain Hotel junction at Shilphata in Thane. The project cost is estimated at Rs 8,000 crore.
The second project, a 9.8-km elevated creek road bridge, will connect Bhayandar with Ghodbunder Road in Thane. The cost of this project is estimated at Rs 6,000 crore.
The elevated bridge is likely to be second in length only to the Mumbai Trans Harbour Link (MTHL) bridge, also called Atal Setu, which, at almost 22 km, is both the longest bridge and the longest sea bridge in India.
What was L&T's contention?
MMRDA invited tenders for the two projects on July 27, 2024. L&T approached the Bombay HC claiming not enough time had been allowed to collect geotechnical data. On October 8, MMRDA assured that the last date for the submission of bids would be extended by 60 days.
Earlier this month, L&T filed two petitions before the HC, contending that MMRDA did not follow a fair and transparent tender process.
The company said that it had submitted its technical bid on December 13, 2024, and the bid was opened on January 1, 2025 – however, it had received no communication about the outcome of the evaluation.
After learning that MMRDA had scheduled the opening of financial bids on May 13 and invited select bidders for it, L&T suspected that it had been excluded from the process, the company submitted.
This, L&T said, violated the principles of natural justice. The Instructions to Bidders (ITB) – which are detailed guidelines for potential bidders to prepare and submit their bids for a specific project – are discriminatory, L&T said.
What was MMRDA's stand?
MMRDA claimed that as per the clauses of ITB, it was not required to intimate L&T that its technical bid had been found unresponsive before the opening of financial bids.
Once L&T had accepted the terms of the tender, it could not oppose the opening of the financial bids, MMRDA submitted. It argued that public infrastructure projects should not be delayed, and L&T's pleas deserved to be dismissed.
And what did the High Court rule?
A Vacation Bench of the court dismissed L&T's pleas and declined to continue the stay on opening of financial bids for the elevated road. In the case of the tunnel project, the Bench rejected L&T's plea, noting a 'suppression of material facts'.
The HC said it had to be 'mindful' that the matter involved 'mega infrastructure projects of significant public importance', and 'any delay…would adversely impact the execution of the project'.
The court gave L&T the opportunity to approach the Supreme Court in appeal.
What happened in the Supreme Court?
L&T submitted before the SC that there was an arbitrary declaration of the L1 (Lowest one) bid for both projects to Hyderabad-based Megha Engineering and Infrastructure Ltd (MEIL), even though its bid was at a substantially higher project cost compared to L&T's.
L&T claimed that compared to MEIL, its price bid was almost Rs 2,521 crore less in case of the tunnel project, and Rs 609 crore less for the elevated road project.
MMRDA argued that the question of price did not arise if the petitioner was disqualified. However, the Bench disagreed, and said it shall be considered in case of 'public interest matters' and 'public money would be saved'.
On May 26, the SC said it was difficult to comprehend that the technical bids submitted by L&T – the company which had been chosen to execute the Central Vista project in New Delhi – had been rejected for the Thane-Ghodbunder to Bhayandar tunnel and elevated road projects.
On May 29, the SC reiterated that the difference of nearly Rs 3,100 crore between the two bidders was 'not a small amount'.
Solicitor General Tushar Mehta representing MMRDA submitted that the disqualification was not on 'flimsy or fanciful grounds' and the authority would justify its decision and respond to the court's queries during the next hearing. This hearing took place on Friday.
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