MbPA’s quote to lease land for SoBo twin tunnels more than entire project cost

MbPA’s quote of ₹8,500 crore is for a 99-year land lease. That’s more than the total project’s cost— ₹7,765 crore

Mumbai: That Mumbai is India’s most expensive real estate market is well known. But if you thought the exorbitant rates are only applicable to land above sea level, get this: the Mumbai Port Authority (MbPA) has sought ₹8,500 crore from the Mumbai Metropolitan Region Development Authority (MMRDA) to acquire its land that will be used to build underground twin tunnels connecting the Mumbai Coastal Road with the Eastern Freeway. That’s more than the total project’s cost— ₹7,765 crore.

MbPA’s quote to lease land for SoBo twin tunnels more than entire project cost

MbPA’s quote of ₹8,500 crore is for a 99-year land lease. It has also given an option of a 35-year lease that will cost ₹1,500 crore. These amounts have possibly been calculated based on the Indian government’s Policy Guidelines for Land Management, 2015.

The twin tunnels are part of an ambitious plan to connect Mumbai’s western and eastern seafronts. MMRDA had invited bids for the project in January 2023, with an estimated cost of ₹6,500 crore. In July that year, Larsen & Toubro emerged as the lowest bidder with a ₹7,765 crore quotation.

The 9.23 km-long twin tunnel project would require a portion of MbPA’s land near Orange Gate. During the construction phase, just over 4.25 hectares of land are needed for men and machinery, as well as to launch the tunnel boring machine. So far, MMRDA has secured nearly two hectares for this purpose.

“For the plot needed from the MbPA, they have done a certain calculation, as per which MMRDA has been asked to pay around ₹8,500 crore. This is more than the project’s cost,” a senior MMRDA official told Hindustan Times.

Post-construction, only one hectare will be permanently occupied because an entry-exit ramp will be constructed on it. The remaining 3.25 hectares will be restored and returned.

According to an MMRDA official, if the cost of the land is calculated based on the current market rate, it would not exceed ₹450 crore. In the case of a ready reckoner rate-based calculation, the amount further reduces to around ₹160 crore- ₹175 crore.

“Over the course of the project, we will have discussions with [MbPA]. I am confident they will understand that the project will only add value to their land holdings, given that there is a plan to develop Mumbai’s eastern waterfront on MbPA’s land, and a win-win solution will be arrived at,” the official added. MbPA’s estate department did not respond to Hindustan Times’ request for comment.

Once the twin tunnels are ready, they will provide a ring-road connectivity to switch to and from Mumbai’s eastern and western coasts. The road connectivity would extend to Navi Mumbai on the east via the Mumbai Trans Harbour Link or Atal Setu and to the western suburbs via the coastal road and a chain of sea links that are being constructed.

This east-west underground linking project is being carried out to decongest areas in south Mumbai like the Crawford Market junction, GPO junction and CSMT junction. The road will act like a bypass for traffic headed to and from Marine Drive, Malabar Hill, Walkeshwar and Nepean Sea Road.

The project is challenging as the tunnels would pass through some of the most congested urban areas, crossing railway lines, the underground Mumbai Metro 3 line, and water supply and sewage lines. The tunnels will be built at a depth of 40 metres from the ground level to ensure they do not obstruct the foundations of the railways or high-rise buildings. A ramp will be built to connect the Eastern Freeway to the Mumbai Port land. The construction period for the project is estimated to be four and a half years.