Sacked in 2018, team from Scomi now helping Malaysian JV company win Mumbai monorail project?

An Indian and Malaysian company have joined forces to bid for a multi-million ringgit Mumbai monorail project – and they are apparently being coached by the team that was sacked by the Mumbai Metropolitan Region Development (MMRDA) three years ago.

The Medha Servo Drives Pvt Ltd-SMH Rail Bhd joint venture is bidding for the design, manufacture and supply of 10 new Monorail Rakes of four cars each in a tender by MMRDA.

However, it is understood that the Medha-SMH team has been in talks with key members from Scomi Group Bhd – via another Malaysian company, Sepadu Suria Holdings Sdn Bhd.

A quick check with the Companies Commission of Malaysia revealed that one of Sepadu Suria’s directors is Datuk Wan Shaharuddin Wan Mahmood. Wan Shaharuddin was appointed to the board of Scomi Group on March 26.

Scomi’s supposed indirect involvement raised eyebrows as:

  • MMRDA had terminated the monorail contract awarded to Scomi’s subsidiary, Scomi Engineering, and its Indian partner Larsen & Toubro Ltd, in 2018.
  • It is alleged that several Scomi Transit Projects Sdn Bhd’s senior members were involved in conversations with Medha Servo Drives in the run-up to the bidding process.
  • The monorail design used in the Mumbai Monorail project now belongs to another Malaysian company, Petra Transit Systems Sdn Bhd, as the latter acquired Scomi’s monorail technology in November 2020.

The other two bidders for the project are Bharat Heavy Electricals Limited and Titagarh Wagons Limited. It was reported last month that the lowest bidder had quoted a bid value of around INR 606 Crores (RM340 million).

With the Scomi team’s past experience in monorail design capabilities, ownership of a monorail design, and having been part of the project, the supposed silent partnership is viewed as a “win-win-win” situation for the parties involved.

Scomi did not state the reason for the termination in its Dec 17, 2018 filing with Bursa Malaysia, but it was reported by the Indian press that “the consortium had failed to fulfil its contract obligations, despite getting several extensions”.

MMRDA had, in June 2020, called for a similar tender, which drew in interest from China Rail Road Corporation, and another Chinese company, Build Your Dream. MMRDA, however, cancelled the bidding process.

In a press statement then, MMRDA said: “MMRDA does not want again, to create a Scomi-like situation when it has to depend upon foreign manufacturers, even for spare parts of monorail coaches. In the situation that the two Chinese companies are dictating us to change tender conditions, MMRDA administration has decided to search for technology partners in India and develop it in India. As we do not require large quantities, it is possible for Indian companies to manufacture and supply in less time.”

Scomi has been classified as a financially-distressed Practice Note 17 (PN17) company since December 2019, and has until September to submit its regularisation plan. In April, Scomi Group applied for judicial management as part of its financial restructuring scheme.

In May, the group posted a net profit of RM0.52 million in the third quarter (Q3) ended March 31, 2021.