MMRDA to dole out Rs3,500 cr for trans harbour link project
Fifty years after the Mumbai TransHarbour Link was first mooted, the Mumbai Metropolitan Region Development Authority (MMRDA) is going all out to make the bridge a reality.mumbai Updated: Nov 24, 2011 01:36 IST
Fifty years after the Mumbai TransHarbour Link was first mooted, the Mumbai Metropolitan Region Development Authority (MMRDA) is going all out to make the bridge a reality.
The MMRDA will spend Rs3,500 crore from its own pocket, the largest amount spent by a state agency for a public-private partnership project, on the project.
The MMRDA is also contemplating providing a set of concessions to the builder.
"We are very keen on the project. The sops are being contemplated to ensure there is no hindrance in its completion," metropolitan commissioner Rahul Asthana said.
The planning agency will provide 20% of the project cost as viability gap funding (VGF).
VGF is the amount that the state gives to a private builder in charge of projects of public importance to ensure that it is financially viable for the private operator.
The MMRDA will also provide an additional 20% of the cost in the form of soft loans to the concessionaire at a rate of interest of less than 8%, which is half of the prevalent market lending rates.
The MMRDA may also provide 10 hectares of land on lease to the concessionaire in Navi Mumbai. It is in talks with CIDCO to identify a suitable plot. "The concessionaire will have to give it back once the concession period ends," Asthana said.
The planning agency is also contemplating sharing the project's revenue risk.
The MMRDA has predicted that 44,975 vehicles will use the bridge everyday. It will give the concessionaire money for his losses if traffic on the bridge falls below this number.
"If the number is more than this, however, the concessionaire will have to give us the extra amount," Asthana said.
First Published: Nov 24, 2011 01:20 IST