Auditor pulls up MMRDA over Rs 180-crore unrecovered dues

The Comptroller and Auditor General (CAG) has pulled up the Mumbai Metropolitan Region Development Authority (MMRDA) over its failure to recover an additional lease premium of Rs 180 crore from Reliance Industries Limited (RIL) for delaying the construction of a convention and exhibition centre in the city.

In a report, which was released on Friday, on the general and social sector in March 2015, the CAG stated that despite seeking a reply from the government, the authority had failed to submit the same till February 2016. “The MMRDA had invited a request for proposal (RFP) in November 2005 for a lease of 75,000 square metres (sq m) of plot in ‘G’ block of Bandra-Kurla Complex (BKC) for the purpose of development, operation and maintenance of a convention and exhibition centre (CEC) and a commercial complex (CC). Of the 75,000 sq m, land measuring 55,000 sq m was allocated for CEC and 20,000 sq m was allocated for the CC. As per the RFP, the CEC’s plot was to have a built-up area of 65,000 sq m while the CC’s plot was to have a built-up area of 50,000 sq m,” the CAG stated.

Of the five offers received, the rate offered by RIL for the CC component was found to be the highest at Rs 1,94,800 per sq m (against the reserve price of Rs 70,000 per sq m). The MMRDA executed a lease deed in September 2006 with RIL for 80 years on payment of a lease premium of Rs 1,104 crore. Subsequently, upon a request from RIL, MMRDA allotted in March 2007 an additional built-up area of 72,500 sq. m. for both CEC (41,000 sq m) and CC (31,500 sq m) at the weighted average rate of Rs 96,000 per sq m of the original allotment, totalling Rs 696 crore. As per the lease deed, RIL was to complete the construction of the CEC and CC within a period of four years, it added. Meanwhile, the MMRDA extended the construction period from August 31, 2010 to January 29, 2015, owing to a pending court matter.

The CAG observed that RIL could not complete the construction by the extended date of January 29, 2015.