French Engineering Firm Systra Accuses MMRDA Of Corruption; Payment Delays, Moves Bombay HC

French engineering company Systra has alleged corruption within the Mumbai Metropolitan Region Development Authority (MMRDA), claiming undue financial demands and delayed payments.

According to a report by The Times of India, the company asserts that officials pressured it to inflate contractor orders, obstructed staff approvals, and imposed arbitrary penalties.

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In a letter dated November 12, 2024, the French embassy urged Maharashtra's resident commissioner, Rupinder Singh, to intervene, citing "severe harassment and challenges" faced by Systra in its role as a general consultant for MMRDA projects.

Chief Minister Devendra Fadnavis stated that he had not received the complaint but assured that transparency remains central to his administration.

"Transparency is at the core of our governance. We will ensure it is upheld at all costs," he said.

MMRDA has dismissed the accusations as "baseless" and a "deliberate attempt to tarnish" its reputation.

The agency submitted a report to the government detailing contractual and regulatory breaches by Systra, including cost overruns rising from 4.27% to 10%. Consequently, MMRDA has issued a termination notice to Systra for violations related to security and operations.

According to Systra, problems began in August 2023 following a leadership change at MMRDA. As a consultant for several metro lines, the company claims that officials made financial demands, allegedly citing pressure from higher authorities.

"Since August 2023, Systra has been encountering severe difficulties in its daily operations, culminating in the suspension of payments due in January 2024," the company stated.

Between January and February 2024, MMRDA suspended payments, citing deficiencies in already-resolved issues across multiple metro projects, including Thane-Bhiwandi-Kalyan (Line 5), Dahisar-Mira-Bhayander (Line 9), and Lokhandwala-Vikhroli (Line 6).

While some suspensions were lifted in June 2024, payments for civil works on Lines 5, 9, and 7A remain frozen, with Rs 30 crore still unpaid.

Systra has further alleged that it was pressured to approve inflated orders for a contractor on Line 9. "As we have not complied... we believe MMRDA is continuing to suspend our payments," the company stated. It also claims that similar tactics are being used against DB E&C, a German consultancy working on Line 4.

MMRDA insists that the issue is a commercial dispute and argues that Systra is inappropriately presenting it as a diplomatic matter.

"Regrettably, Systra appears to be escalating this into a dispute between a foreign country and an agency of the Maharashtra government, which is not an appropriate course of action," the authority stated.

Systra has now taken the matter to the Bombay High Court. Its general manager for Mumbai, Arun Mishra, declined to comment, citing that the case is currently sub judice.