State cabinet clears proposal to buy Metro 1 from Anil Ambani | Mumbai news - Hindustan Times
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State cabinet clears proposal to buy Metro 1 from Anil Ambani

Mar 12, 2024 07:24 AM IST

Mumbai Metro One was the first metro project undertaken under the Build-Operate-Transfer (BOT) policy in 2007. MMRDA has a 26% stake in the joint venture, called Mumbai Metro One Pvt Ltd (MMOPL), while Ambani has a 74% stake

MUMBAI: The state cabinet on Monday approved in principle the purchase of the Ghatkopar-Versova Mumbai Metro One jointly owned by the Anil Ambani-led Reliance Infrastructure Limited (R-Infra) and Mumbai Metropolitan Region Development Authority (MMRDA). Ambani’s stake has been valued at 4,000 crore.

State cabinet clears proposal to buy Metro 1 from Anil Ambani
State cabinet clears proposal to buy Metro 1 from Anil Ambani

Mumbai Metro One was the first metro project undertaken under the Build-Operate-Transfer (BOT) policy in 2007. MMRDA has a 26% stake in the joint venture, called Mumbai Metro One Pvt Ltd (MMOPL), while Ambani has a 74% stake. Earlier, several MMRDA commissioners were against doing a project jointly with a private firm.

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On Monday, the state cabinet approved a report by retired IAS officer and former chief secretary Johny Joseph, which valued the 74 per cent stake held by R-Infra at 4,000 crore. The Joseph-led panel used the discounted cash flow model to arrive at the valuation figures and used the report of KROLL, a financial advisory firm, said sources in the government.

The MMRDA-Reliance Infra joint undertaking was full of disputes. Although Mumbai Metro One is the most crowded metro to date, the R-Infra-led MMOPL always claimed losses. MMRDA also questioned MMOPL’s commercial exploitation of the metro premises as well as the ticketing structure, and rejected MMOPL’s demand to raise fares.

The project’s costs were also disputed. While MMOPL claimed that it cost 4,026 crore to construct, MMRDA refuted this and said that the cost was 2,356 crore. The BMC too asked MMOPL to pay property tax. In 2020, MMOPL wrote to the state government and MMRDA, asking them to buy its stake after losses during the Covid-19 pandemic.

Former chief minister Prithviraj Chavan said that there was a dispute about the acquisition price. “The financial and legal advice to the government was that the price quoted was very high,” he said. “But this government is favouring the Anil Ambani group.”

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