The Hindu Business Line : Monorail project: Challenge for L&T

While bagging the country’s first monorail system project is no doubt, one more feather in Larsen & Toubro’s cap, the execution of this first-of-its-kind project in the country within the stiff timeline provided, poses a challenge to the company and the consortium of which it is a member.

A consortium of Larsen & Toubro and Scomi Engineering of Malaysia has bagged an Rs 2,460-crore order from the Mumbai Metropolitan Region Development Authority (MMRDA) to design and build the first monorail system in India. L&T, being the lead consortium player with a 55 per cent share, would have a revenue share of Rs 1,400 crore.

Monorails are among the world’s most modern urban transport systems, which allow cars of the rail system to move on a single beam in an elevated corridor.

Stiff timeline

The monorail project had been subject to a lot of controversy. During the bidding stage, the Ambani brothers and railcar manufacturer Bombardier evinced interest in the project. While the Mukesh Ambani group bid was disqualified, Bombardier withdrew from the race. This left L&T-Scomi and the Anil Ambani-led Reliance Infrastructure-Hitachi consortium competing for the project. The latter was soon disqualified by the MMRDA on technical grounds. Reports have it that the Reliance-Hitachi team had stated that the timeline of 24 months originally stipulated made it impossible for it to qualify and had raised concerns over quality issues, given the stiff deadline. Hitachi had also alleged that world-wide, monorail projects took 36 months for completion.

The MMRDA had earlier been reported to have announced a penalty of Rs 50 lakh a day on the short-listed consortium should the completion go beyond 24 months.

The above developments suggest that the project, though prestigious, may carry a few challenges to the L&T-led consortium, in terms of deadline as well as standards. As part of its new initiatives, L&T had come up with a dedicated Railway Business Unit to tap emerging opportunities in the rail sector. The company has already won design and build contracts from the Delhi Metro Rail Corporation.

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