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State to get expert financial advice

india Updated: Feb 17, 2009 01:03 IST
Zeeshan Shaikh
Zeeshan Shaikh
Hindustan Times
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With Bidders turning their back on the second Metro line, the Mumbai Metropolitan Region Development Authority (MMRDA) is looking to turn the challenge into an opportunity.

Bracing itself for the possibility that it may have to build infrastructure projects like the Metro and monorail on its own, the MMRDA has decided to appoint leading financial brains in the country to help it formulate a financial model that will help the city’s planning body make more money, which can be used in infrastructure projects.

“We have asked all top-notch consultants in the country to help us formulate a financial strategy which will help us shore our revenue resources and find possible ways of making money apart from selling land,” a senior MMRDA official said.

Talks are on with leading consultants like Crisil, KPMG, IL&FS and IDFC who have been asked to submit their bids for the project.

“Our coffers are not going to be full all the time. We hope these consultants will help us explore avenues other than land sale to raise money,” the official said.

The consultant, which will get 60 days to come up with a proposal, may end up recommending various possibilities including levying betterment charges and congestion charges in areas developed by the MMRDA. The consultant is also expected to recommend probable areas where the MMRDA can procure land for future development. The MMRDA has been making money by selling land at the Bandra Kurla Complex.

Though it is one of the richest government bodies and is expected to spend over Rs 6,650 crore on the city’s infrastructure this year, its revenue sources have been hit by the real estate slump.

For the last two years, the MMRDA has been presenting a budget deficit and drawing money from its Rs 12,000 crore corpus to fund infrastructure projects in the city.

Interestingly, with the state government itself in a financial mess, it has been increasingly depending on the MMRDA to bail it out by funding infrastructure projects like the Rs 8,000-crore Mumbai Trans Harbour Link.