Statutory audits are being carried out as per the Concession Agreement and the Companies Act and by one of the big four audit firms approved by MMRDA. We, therefore, reiterate that no public interest will be served by the CAG audit — MMOPL spokesperson
Mumbai: At a recent meeting with the new fare fixation committee (FFC), the Mumbai Metropolitan Region Development Authority (MMRDA) once again raised the issue of the Mumbai Metro One Private Ltd (MMOPL) reluctance to allow its accounts to be audited by the Comptroller and Auditor General of India (CAG).
MMRDA wants to ascertain the actual reason for “the increase in the project cost”, claimed by MMOPL. MMOPL claims the project to be in excess of Rs 4,000 crore and MMRDA claims it to be around Rs 2,300 crore. To recover this increased project cost, MMOPL had proposed to increase fares for the Metro 1 (Versova-Andheri-Ghatkopar) corridor, from the existing slab of Rs 10, 20, 30, 40 to Rs10, 20,25, 35 and 45.
The previous FFC had recommended fares between Rs 10 and Rs 110 in July 2015. To oppose the fare hike, MMRDA moved the Bombay High Court. In December 2017, the HC quashed recommendations of both MMOPL and the previous FFC. Since then MMRDA and MMOPL have been in a legal wrangle over the fare hike and the actual construction cost of Metro 1. The HC had observed in its December 2017 judgment:
In the arbitration proceedings, if ultimately it is held that MMRDA was not responsible for the delay and consequent cost overruns, then, the prejudice to public interest, will be irreversible. At the very least, MMOPL will be unjustly enriched at the cost of commuters. Even if MMOPL succeeds in arbitration proceedings and is awarded the claimed amount of Rs 1,939 crores, even then, the issue of unjust enrichment at the cost of commuters and taxpayers will arise.
This is because MMOPL, by then, will have recovered substantial amounts by way of the enhanced fares, and will further have to be paid compensation amount. At the recent meeting with the new FFC, MMRDA made the submission that on August 1, 2015, the Government of Maharashtra (GoM) had issued a show-cause notice to MMOPL to allow audits of their accounts by CAG.
On August 3, 2015, CM Devendra Fadnavis had requested the union ministry of urban development and CAG to expeditiously take up an audit of the accounts. On August 21, 2015, MMOPL consented to the CAG audit. Even after this, as audits of the entire account did not commence on September 8, 2015, MMRDA wrote to the state government to send a reminder to CAG for undertaking the full audit.
However, on November 3, 2015, MMOPL withdrew its consent to the CAG audit. Ever since, it continues to remain noncooperative, MMRDA claimed. An MMOPL spokesperson said, “We are unaware of FFC’s deliberations with MMRDA on this matter. However, we have clearly indicated to MMRDA that statutory audits are being carried out as per the Concession Agreement and the Companies Act and by one of the big four audit firms approved by MMRDA.
We, therefore, reiterate that no public interest will be served by the CAG audit.” The Metro 1 corridor is the first project based on the publicprivate partnership (PPP) model in India. The MMOPL has a 69 per cent stake, while MMRDA has a 26 per cent stake and the French company Veolia owns 5 per cent.
