Mumbai-Nagpur expressway: MSRDC to raise Rs5,000cr from govt agencies
Mumbai city news: Senior MSRDC officials said the government bodies will loan the money at an interest rate of 8.14% for up to 10 yearsmumbai Updated: May 31, 2017 01:23 IST
The state government is exploring options to raise funds to start work on the ambitious Rs46,000-crore Mumbai-Nagpur Expressway project.
Chief minister Devendra Fadnavis has directed five state government undertakings to contribute Rs1,000 crore each to the cash-strapped Maharashtra State Road Development Corporation (MSRDC), which is building the project.
“The equity raised from the five government agencies will be mainly used for purchasing land or to compensate farmers,” said Eknath Shinde, minister of public works department (public undertaking).
The state government is also mulling an additional fuel (petrol and diesel) surcharge in the 10 districts including Thane, through which the expressway will pass.
The 706-km expressway will start from Nagpur and pass through Wardha, Amravati, Washim, Buldhana, Jalna, Aurangabad, Ahmednagar, Nashik and Thane districts.
The MSRDC officials said that cess was one of the options the agency would explore to raise additional revenue for repayment of loans.
The MSRDC will raise the funds, as a subordinated loan, from government agencies —Mumbai Metropolitan Region Development Authority (MMRDA), Maharashtra Housing and Development Authority (Mhada), City and Industrial Development Corporation (Cidco), Maharashtra Industrial Development Corporation (MIDC) and Slum Rehabilitation Authority (SRA).
The MMRDA, headed by Fadnavis, has already approved its share of equity participation in the project. The MSRDC has already got Rs1,800-crore loan from Housing and Urban Development Corporation (Hudco).
Senior MSRDC officials said the government bodies will loan the money at an interest rate of 8.14% for up to 10 years. “Once these para-government agencies come forward for equity participation, we will ask their officials to come on board as directors in the special purpose vehicle (SPV),” said a senior MSRDC official.
The corporation also plans to raise Rs26,750 crore from the domestic market and multilateral agencies. The Asian Development Bank (ADB) is expected to fund Rs13,750 crore and the rest will be raised through SBI Caps.
Around Rs24,000 crore of the Rs46,000-crore project will be spent on civil construction and the rest for land acquisition, development of nodes, contingencies and financial charges, utility shifting and so on.
“Toll, our major source of revenue, will start after the road is constructed. Our interest servicing and repayment will start earlier,” the official added.