The state’s richest infrastructure organisation, the Mumbai Metropolitan Region Development Authority (MMRDA), could be staring at bankruptcy over the next five years. Haphazard planning and more projects than it can handle are to blame for this.
Currently, the MMRDA has a Rs 9,000-crore corpus to fund infrastructure projects in the city. But, officials now claim that due to the large number of projects being undertaken and no new revenue-generators, the agency is in danger of running out of money.
The MMRDA, whose ambit is to improve infrastructure in the city has, over the past few years, diversified into power generation, rental housing, water desalination and creating innovation parks, causing a strain on its revenue.
“In the present scenario, we are under threat of going into a deficit in the next 4-5 years. We are seriously looking at other avenues to raise money,” Metropolitan commissioner Rahul Asthana said.
The MMRDA, which was set up by the state government as a special planning body for the Mumbai Metropolitan Region, was given a 180-hectare marshland in what is now the Bandra Kurla Complex.
The agency was asked to raise its own funds by selling the land, which it managed to do successfully, turning BKC into one of the most preferred office locations today.
The MMRDA managed to make large amounts of money through the sale of the land. Today, however, the MMRDA is left with just 20 hectares that it can exploit.
Under the most favourable market conditions, the MMRDA can rake in close to Rs 40,000 cr from this land. But, this money seems inadequate to fund the growing infrastructure projects in the city.
The MMRDA has taken up projects worth Rs 2 lakh crore only to improve the city’s transport system.
Even though these projects are on a public private partnership model, the MMRDA will have to shell out close to Rs 40,000 cr from its pocket as viability gap funding to ensure the projects are completed.
MMRDA officials admitted raising money has become a matter of concern.
The MMRDA has floated various proposals including charging ‘development fees’ on new properties in Mumbai. The MMRDA is also looking at the possibility of benefiting from the real estate potential of areas around projects like the MTHL, Metro and Monorail.