Mumbai Trans-Harbour Link: MMRDA explores funding option

Mumbai

Even as Prime Minister Narendra Modi will launch the much-delayed ambitious Mumbai Trans-Harbour Link (MTHL) project on December 24, the state government is looking at options to formalise its funding.

Earlier, the state government had refused to stand guarantor for the loans for several big-ticket infrastructure projects in the Mumbai Metropolitan Region, citing that it would add to its burden. The state already has burden of over Rs3 lakh crore on the exchequer.

The Mumbai Metropolitan Region Development Authority (MMRDA) has proposed to split the loan for the Rs17,750-crore project into two parts to reduce the burden on the state government. The Japan International Cooperation Agency (JICA) has given in-principle approval to fund 80% of the cost, which comes to Rs14,200 crore, for the 22-km link that will connect Sewri and Nhava. A senior state government official said the department of economic affairs has turned down MMRDA’s request for a direct loan from JICA or any other multilateral agencies and hence an option to split the loan is being explored.

According to a senior bureaucrat, the state finance department is considering the option. “Initially, the MMRDA can borrow around Rs7,000 crore for the project. After a couple of years, they can borrow the remaining amount by going in for a second loan from the same multilateral agency. With this arrangement, the state can give its sovereign guarantee without much burden on the state budget,” the senior bureaucrat said.

Apart from MTHL, loan agreements of several other infrastructure projects, including Metro rail corridors, are yet to be formalised due to the state government’s change of stand.

Meanwhile, in a rush to meet deadlines, the MMRDA has decided to fund the civil works of Metro corridors. While it will reduce time and cost overruns, it could lead to thin spreading of projects. The agency has already started work on two Metro corridors in the city – the Rs6,410-crore Metro line 2A between Dahisar and DN Nagar and the Rs6,208-crore Metro 7 line between Dahisar East and Andheri East. The ADB has given in-principle nod to fund 36% of Metro-7 and 44% of Metro-2A.

The Asian Development Bank (ADB) has assured partial funding for Metro 2B connecting DN Nagar and Mankhurd, which is estimated to cost Rs10,970 crore. The World Bank has expressed interest in funding Metro 4 between Wadala and Kasarvadavali in Thane, which is estimated to cost Rs14,459 crore.

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