MMRDA to raise Rs 150.71 billion loan for twin tunnel project

16 Oct 2024 CW Team

The Maharashtra government has classified the Thane-Borivali underground tunnel project as a "Vital Urban Transport Project" and authorised the Mumbai Metropolitan Region Development Authority (MMRDA) to raise loans of up to Rs 150.71 billion from bilateral or multilateral financial institutions at competitive interest rates.

According to the government resolution (GR), the state has approved an interest-free subordinate loan of Rs 24.17 billion for the project. This includes Rs 11.44 billion from the state government, Rs 5.72 billion representing 50% of the central government’s contribution, and Rs 7 billion allocated for land acquisition.

The 11.85 km project, consisting of 10.25 km of tunnels and 1.60 km of connecting roads, will provide a 3+3 lane corridor between Thane and Borivali. The total estimated project cost is Rs 188.38 billion, with MMRDA contributing Rs 13.5 billion. Under the financial model approved by MMRDA and the state, 20% of the project will be funded through contributions, with the remaining 80% financed by loans.

The GR specifies that MMRDA will manage loan procurement and repayment independently. "The state government will not bear any responsibility for repaying the principal, interest, or any associated charges," it stated. MMRDA is required to ensure that no financial burden beyond the approved budget is placed on the state government.

The resolution further mandates that MMRDA must address any unforeseen cost escalations internally, without seeking additional state assistance.

Designated a "Vital Urban Transport Project" and a "Key Infrastructure Project," the tunnel initiative may also involve setting up a Special Purpose Vehicle (SPV) if needed, according to the GR. (ET)

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