Row over funding delays work on Rs4,500-cr Worli-Haji Ali sea link
According to the earlier plan, work on the Worli-Haji Ali sea link was expected to begin in January.mumbai Updated: Jul 01, 2011 02:07 IST
According to the earlier plan, work on the Worli-Haji Ali sea link was expected to begin in January.
This was missed and Reliance Sealink One Private Limited, which had bagged the contract to build and operate the sea link, was expected to complete financial closure and start construction on the Rs4,500-crore project by July 3. But work may be delayed because of differences between the state government and Reliance Sealink One Private Limited, a joint venture of Reliance Infrastructure-Hyundai Consortium, over implementing the project.
The state seems to have to have developed cold feet in providing funding in the form of viability gap funding (VGF) for the project. The base cost of the Worli-Haji Ali sea link is Rs1,120 crore. Reliance will also have to buy the 5.6-km Bandra-Worli sea link from the Maharashtra State Road Development Corporation (MSRDC) for Rs1,640 crore.
The contract says the state was expected to provide the VGF of Rs1,392 crore to Reliance in three installments a year. Reliance said it can’t start the project as the MSRDC is yet to fulfil some obligations. The MSRDC, reeling under a debt of more than Rs4,000 crore, has said it can give the VGF but Reliance seems to be hesitant in accepting this.
“We only have to give Rs464 crore as VGF in the first year. We can easily do so and can also raise money for the installments,” said Bipin Shrimali, MSRDC vice-chairman and managing director.
The state has declined and demanded that MSRDC review the project to see if it can be made economically viable by turning it into a four-lane or whether a coastal road can be built.
“We are keen to take over the sea link as per the agreement. We are waiting for some obligations to be complied by the MSRDC and the state,” a Reliance spokesperson said.