Mumbai Metro impasse: BMC, MMRDA lock horns over cost-sharing for project

The planning authority has spent ₹19,141.63 crore for developing metro corridors and last mile connectivity to metro stations over the past few years

Mumbai: The Mumbai Metropolitan Region Development Authority (MMRDA) and the Brihanmumbai Municipal Corporation (BMC) are mired in dispute over cost-sharing for the metro rail and other multimodal projects.

An aerial view of the Mumbai Metro 2A at Kandivali, in Mumba. (Satish Bate/HT Photo)

The planning authority has spent ₹19,141.63 crore for developing metro corridors and last mile connectivity to metro stations over the past few years. The BMC is supposed to pay 25% of this amount or ₹4,959 crore, from the 1% development charge levied on real estate projects. But the civic body is willing to pay only ₹2,500 crore, claiming it has incurred heavy expenses on the coastal road and other infra projects.

To tide over the crisis, the MMRDA has decided to commercialise its land bank in the city. It has already invited tenders for leasing seven plots in the Bandra Kurla Complex and hopes to raise at least ₹5,947 crore through the exercise.

Metro and real estate

The MMRDA is developing seven metro rail corridors to improve connectivity in the metropolitan region – these are lines 2A, 2B, 3, 4, 6, 7, and 7A, covering a total distance of 142 km. The authority has already spent ₹19,144 crore and wants the BMC to contribute its share of ₹4,959 crore.

“In 2016, the state government mandated that BMC must contribute 25% of the cost for metro projects. This is what we are asking for,” said an MMRDA official. As per directions of the Unified Mumbai Metropolitan Transport Authority (UMMTA) in October 2016, BMC also needs to contribute 50% of the cost for multimodal integration outside metro corridors.

The MMRDA argues that BMC must pay its share because the metro corridors boost the city’s infrastructure and raise the capital value of land and property prices, leading to a greater collection of property tax.

“The metro projects enhance the livability index of citizens and improve the quality of commute,” said an MMRDA official.

Earlier this year, the authority wrote to the BMC, urging the civic body to pay its share. “The MMRDA is implementing the Metro Master Plan of which Metro-1 has been operational since June 2014. Whereas Metro-2A and 7 have been operational from January 2023 catering to 2.5 lakh passengers. Civil works have commenced for Metro 2B, 3, 4, 4A, 6 and 7A. All these fall under BMC’s area. MMRDA has also undertaken work on multimodal integration so that each station is seamlessly integrated with all existing modes for last mile connectivity,” said the letter.

Urban planners agreed that infrastructure development has a direct correlation with real estate and property prices, which have been appreciating over the past few months owing to the operational and under construction metro lines.

Out of the ₹4,959 crore the BMC owes the MMRDA, the civic body paid ₹950 crore in March and ₹1000 crore in April. This money was paid from the 1% development charge collected by BMC from real estate projects.

“This 1% charge, meant for vital infrastructure projects, comes to around ₹5,000 crore. We requested the government for permission to pay 50% of this or ₹2,500 crore to the MMRDA because even we have developed large infrastructure projects such as the Coastal Road and the Goregaon Mulund Link Road,” said a senior civic official.

Following the state government’s nod, the BMC has decided to pay another ₹500 to the MMRDA, taking its total contribution to approximately ₹2,500 crore.

Tiding over cash crunch

The cumulative cost of 10 metro projects, excluding Metro 3 (Colaba-Bandra-Seepz) and Metro 1 (Versova-Andheri-Ghatkopar), is pegged at ₹75,000 crore. The total receipts for 2024-25 are estimated at around ₹39,453 crore, while total expenditures are estimated at ₹46,921.29 crore.

The MMRDA is dipping into its land bank ease over the fund crunch and raise the necessary capital. It has invited tenders for leasing three residential and four commercial plots in the Bandra Kurla Complex for 80 years, from which it expects to earn ₹3,657 crore and ₹2,290 crore, respectively.

Since the BKC is a prime commercial and residential area, leasing the plots will allow the MMRDA to generate funds that can be invested in infrastructure projects, transportation, and other development initiatives across the city. MMRDA has utilised its land bank in BKC in the past as well.

In July, the authority also received approval to raise ₹50,000 crore via bonds to fund the metro corridors and various other infrastructure projects in the city and adjoining areas. This is expected to act as a buffer in case of non-receipt pf payment from the BMC and other sources over the next five years.