Expected to reduce commuters’ woes, the Mumbai Trans Harbour Link is a classic example of how short sighted our bureaucracy can be.
After dilly-dallying with various models for about a year, the state has finally decided to build the project on a public-private-partnership (PPP) basis — a model that was discarded six months ago. The Trans Harbour Link will connect Sewri to Nhava Sheva.
“The Centre has given an in principal approval for giving 20 per cent viability gap funding (VGF) for the project. The project will be built on a PPP basis,” Metropolitan Commissioner Ratnakar Gaikwad said.
VGF is the funding given by the government to contractors building and operating an infrastructure project to make it economically viable to them.
The state had earlier decided to build the bridge on a PPP basis for which a consortium of Anil Ambani’s Reliance Energy and Hyundai had been selected. The consortium had promised to complete the bridge and recover the amount, Rs 6,000 crore, in about 10 years.
The state, however, took over six months to decide on whether the consortium should be allowed to build the bridge. The bidders had by then decided to back off from the project.
The government then decided to build the link on a cash contract basis, with money being provided by Mumbai Metropolitan Region Development Authority (MMRDA). However, there was no taker for the proposal.
The MMRDA and Maharashtra State Road Development Corporation then decided to approach a private entity to build the project and offset the high cost by providing viability gap funding.
As per the new model, the Build-Operate-Transfer operator will be given a 40 per cent VGF, which will be equally funded by the Centre and state.
A tender for building the project will be floated soon, a government official said, on condition of anonymity.