MUMBAI: The cost of the long-pending Mumbai trans-harbour link (MTHL) is set to rise by Rs180 crore to Rs200 crore. The reason: the Mumbai Metropolitan Region Development Authority (MMRDA) will have to pay 1.2% of Rs15,000-crore, the loan it will receive from a Japanese bank, to the Centre as bank guarantee.
The agency will have to bear the cost because the state refused to extend the guarantee, to avoid financial liability at a time it has undertaken major infrastructure projects.
The Japan Inter national Cooperation Agency (JICA) has promised to pay 85% of the project cost (Rs17,700 crore) to the MMRDA. The government policy seeks payment of 1.2% of the loan amount to the Centre as guarantee, in case of external borrowing. There is no clarity on whether it is a one-time fee or annual charge on the outstanding loan amount (principal + interest). The Centre will then issue guarantee for the project – which means it will have to repay the loan, in case the MMRDA fails to do so.
The project cost was Rs4,000 crore, when the tenders for the project were floated in 2005. The more than 400-% hike in the project cost in the past decade is a result of poor planning. “We have taken up infrastructure projects such as metros and highways across the state, and extending guarantee to them can jeopardize our financial condition,” said a state bureaucrat.
{{/usCountry}}The project cost was Rs4,000 crore, when the tenders for the project were floated in 2005. The more than 400-% hike in the project cost in the past decade is a result of poor planning. “We have taken up infrastructure projects such as metros and highways across the state, and extending guarantee to them can jeopardize our financial condition,” said a state bureaucrat.
{{/usCountry}}Last month, the MMRDA invited tenders after the Japanese government approved the loan. Oficials said the first stage of the tendering process has received good response, with many global companies showing interest in the developing the 22.5-km sea link.
The MTHL will connect Mumbai with Navi Mumbai, easing traffic and boost connectivity between Pune and Goa.
Stay updated with all the Breaking News and Latest News from Mumbai. Click here for comprehensive coverage of top Cities including Bengaluru, Delhi, Hyderabad, and more across India along with Stay informed on the latest happenings in World News.
Stay updated with all the Breaking News and Latest News from Mumbai. Click here for comprehensive coverage of top Cities including Bengaluru, Delhi, Hyderabad, and more across India along with Stay informed on the latest happenings in World News.