Coastal road plans could cause a loss of Rs 1,620 crore to MSRDC
Building a coastal road between Haji Ali and Worli may end up saving crores of rupees for the government, but the proposal may prove to be a loss for the cash-strapped Maharashtra State Road Development Corporation (MSRDC).mumbai Updated: Mar 17, 2011 01:18 IST
Building a coastal road between Haji Ali and Worli may end up saving crores of rupees for the government, but the proposal may prove to be a loss for the cash-strapped Maharashtra State Road Development Corporation (MSRDC).
This is because MSRDC may not get the Rs 1,620 crore it was to get from Reliance Infrastructure (RInfra) before it began work on the earlier proposed Worli-Haji Ali sea link.
The MSRDC, which is reeling under a debt of over Rs 4,000 crore, was looking at making money from the sea link project.
As part of the earlier proposal, RInfra had to buy the Bandra-Worli sea link from MSRDC for Rs 1,620 crore before it began constructing the Worli-Haji Ali sea link.
The earlier estimate of constructing the 3.3 km sea link was pegged at Rs 1,120 crore.
However, if MSRDC’s plan to build a coastal road gets all the required clearances, the road can be built at one-third the cost.
This proposal is not financially lucrative for Build Operate Transfers like RInfra who are looking at making money from the project. The toll on the coastal road is likely to be low because of its low cost and investors may have a problem in getting returns from the project.
Sources said RInfra is hesitant to build the coastal road, because it is not financially lucrative for them. This means if the firm backs out, the MSRDC may end up losing Rs 1,620 cr, which it was hoping would help stabilise its weak financial condition.
MSRDC officials however said the company was not in the field of money making.
“The coastal road option will help us save public money,” MSRDC vice chairman and managing director Bipin Shrimali said.
MSRDC officials have also spoken of the fear that even if the coastal road is built at a lesser cost, the non-receipt of Rs 1,620 crores could harm to the agencies capability of taking up other infrastructure projects.