25 land parcels to generate ₹9,525 crore for super Eway

The Maharashtra State Road Development Corporation (MSRDC) has proposed to raise ₹9,525 crore or more than 17% of the cost of the ambitious Mumbai-Nagpur super communication

The Maharashtra State Road Development Corporation (MSRDC) has proposed to raise ₹9,525 crore or more than 17% of the cost of the ambitious Mumbai-Nagpur super communication highway by monetising 23 land parcels along the Mumbai-Pune expressway, and one each at Nepean Sea Road and Bandra.

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The agency hopes to mop up around ₹1,200 crore from the 1.5-acre plot on Nepean Sea Road and ₹13,000 crore from the 29-acre plot in Bandra. The request for proposal (RFP) for the first piece of land measuring 1.5 acres at Napean Sea Road will be out by Friday. “The 23 land parcels along the Mumbai-Pune expressway will be taken up at a later stage,” said an official from Mantralaya. Chief minister Uddhav Thackeray recently held a review of the project with the agency officials and asked them to explain the financing model for the expressway. MSRDC officials told Thackeray that at least 22% of the construction work is complete and the project will be completed before its 2021 deadline.

Radheshyam Mopalwar, MSRDC vice-chairman and managing director, said, “The CM was very positive about the project. We plan to complete it six months ahead of the deadline. Financial closure has been achieved for ₹24,500 crore, while the rest of the amount of the loan is expected to be sanctioned soon. Barring a small amount by a state-owned corporation, no other financial institute has asked for state guarantee.” “The additional money could be used for other MSRDC projects,” said an official from the agency.

The 701-km e-way, estimated to cost ₹55,335 crore, was a pet project of former chief minister Devendra Fadnavis, and is being implemented in 16 packages covering 24 districts of four revenue divisions. The portions in Vidarbha and Marathwada are progressing at faster pace owing to fewer tunnels, subway and faster land acquisition, compared to the portion in Nashik and Thane districts.

Of the total cost, the corporation will raise ₹28,500 crore through loan consortium of 13 banks or financial institutions at an interest rate ranging between 9.75% and 10.2%. The state government has given guarantee to more than half the loans to be raised from the open market. With the state equity raised to 49.40%, the state-owned MSRDC will have to raise ₹27,335 crore, of which ₹9,525 crore will come from the sale of land parcels owned by the corporation. Experts have questioned the bid to monetise land parcels, in the backdrop of the poor financial health of the state and real estate sector.

The finance department of the state government, however, has raised strong objections to the state guarantee given to the loan raised by MSRDC.

“We have doubts over the cash flow expected from the collection of toll once the e-way is operational. If expected toll tax on this 701-km is more than ₹1,700 per trip for small vehicles and more than double for heavy vehicles, the response is unlikely to recover the cost. If MSRDC fails to recover the cost, it will fall back on the state guarantee,” said an official from the finance department.