Cabinet allows MMRDA to raise loan up to Rs 60,000 cr for infra projects
The Maharashtra Cabinet on Saturday gave in-principal approval to the Mumbai Metropolitan Regional Development Authority (MMRDA) to raise Rs 60,000 crore as loan to fund the ongoing big-ticket infrastructure projects in and around Mumbai.
The government also announced it will stand as guarantor to the first tranche of the loan to be raised – worth Rs 12,000 crore – by waiving duties.
Earlier, the MMRDA had appointed SBI Capital Market Limited as an advisor for its resource mobilisation plan and also approved SBI’s appointment to raise Rs 60,000 crore needed to complete projects at a fee of 0.20 per cent of the total funds raised.
Officials said that as per the estimated fund flow, MMRDA will generate a substantial amount of revenue in the next 25 years from various sources, including its land bank. However, in case of delay in projects and non-receipt of revenue from expected sources in the next five years, there could be a shortfall of Rs 60,000 crore needed to implement the projects.“The overall capital expenditure for the infrastructure projects undertaken by MMRDA is estimated to be Rs 1,74,940 crore. In the next five years, MMRDA requires Rs 1,05,434,500 crore to implement the projects, as well as for repair and maintenance and operational costs of Metro projects,” said an official.
However, MMRDA’s accumulated income is expected to be only Rs 77,043 crore, the official added.
Officials said that if only big-ticket projects like Metro corridors, MTHL and a tunnel between Borivali and Thane through Sanjay Gandhi National Park are considered, while the estimated cost of these projects is Rs 97,765 crore, the government has approved a loan of only Rs 42,647 crore, which is being taken from international financial institutions like ADB, NDE, JICA and KEW.“So, Rs 55.118 crore will still be required for the Metro and MTHL projects… for other projects, another Rs 5,000 crore will be needed,” said the official.
“Considering the proposed fund flow in the next five years, if revenue is not generated as expected, then approximately, there will be a shortfall of Rs 60,000 crore. In case of non-receipt of loans, MMRDA will not be able to complete the projects currently in progress.”
Capital revenue from sale of land is MMRDA’s major source of income. As of now, it has land parcels – mainly in BKC and other parts of MMR – worth Rs 49,000 crore. Other sources of income include leasing out grounds, development fee, interest on loans given to municipal corporation/city council and interest on fixed deposits among others.
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