Referred dispute of over ₹71 crore Covid compensation to mediation, hence ACB not involved: Maharashtra govt to Bombay High Court

The Maharashtra government has informed the Bombay High Court that it has referred to mediation the dispute over ₹71 crore Covid compensation given to IRB MP Expressway Pvt Ltd, the contractor of the Mumbai-Pune Expressway. Hence, the Anti Corruption Bureau (ACB) was not asked to look into the same, it said.

Chief Secretary Manu Kumar Srivastava filed the affidavit last week pursuant to high court direction while hearing a public interest litigation (PIL) alleging wrongful gain to IRB for 25 days between March 26-April 19, 2020 when toll was stopped.

PIL filed alleging wrongful gain to IRB

Advocate Pravin Wategaonkar had filed a PIL alleging that Maharashtra State Road Development Corporation (MSRDC) adjusted ₹71 crore as Covid compensation to IRB, causing wrongful gain to the contractor.

Earlier, the HC had asked the chief secretary to look into the grant of sanction for the ACB to conduct an inquiry into a complaint against MSRDC.

Contract between MSRDC and IRB had no compensation clause for epidemic losses

A contract was entered into between MSRDC and IRB from February 2020 till April 2030. The contract clause stipulated no compensation for losses in case of epidemic.

On March 23, 2020, the government notified a lockdown due to Covid-19. IRB was directed to stop toll collection with immediate effect till further orders. However, on April 14, IRB claimed force majeure (unforeseeable circumstances that prevent someone from fulfilling a contract) as a political event under the sub-concession agreement. Hence, it requested extension and reduction of interest payable proportionately.

The board of directors took a decision on April 20 to provide IRB compensation for 25 days revenue loss in toll collection as final settlement in lieu of any increase in the contract period. The offer was accepted by IRB on April 21.

Following query raised by Accountant General (Audit), the MPEL, in October, asked IRB to remit the ₹71 crore within 15 days. The IRB this January wrote to the independent engineer of the project Bloom Companies to initiate mediation between the parties.

The affidavit stated that according to a report by MSRDC given in March, mediation is yet to commence. If the dispute remains unresolved it will be further referred to the director-in-charge for resolution whose decision as per the agreement shall be final and binding.

It also mentions a letter written by PWD to the ACB in March which states that the dispute is of civil nature and pending adjudication.