Maharashtra Cabinet winks at MMRDA to raise loan of Rs 60,000 cr to fund a host of transport infrastructure projects worth Rs 1.74,940 cr

  • Government to provide security for loan of Rs 12,000 cr and waive stamp duty on loan agreements

  • Shinde-Fadnavis government proposes to set up fast-track projects including Metro, MTHL, Thane-Borivali Tunnel Road, Thane Coastal Road and Sewri Worli Connector

  • According to the credit rating agency, MMRDA’s Ind-Ra debt servicing capacity will remain a key rating consideration

Mumbai: In a bid to put a host of transport infrastructure projects worth Rs 1,74,940 crore in the Mumbai Metropolitan Region (MMR) on the fast track, the Maharashtra cabinet chaired by Chief Minister Eknath on Saturday Shinde has given approval to the Mumbai Metropolitan Area Development Authority. (MMRDA) to raise a loan of Rs 60,000 crore from various agencies.

Further, the firm has decided to provide the government guarantee for the loan worth Rs 12,000 crore out of the total Rs 60,000 crore and also waive the guarantee fee. In addition, the firm also authorized a stamp duty waiver on loan agreements to be signed by MMRDA with banks, financial institutions and multilateral financial institutions such as the World Bank, Asian Development Bank and also the Japan International Cooperation Agency.

The list of projects included the development of over 200 km rail metro network, Mumbai Trans Harbor Link, Thane-Borivali Tunnel, Thane Coastal Road and Sewri-Worli Connector. “State government approval is required under MMRDA Section 21 and was granted at today’s cabinet meeting,” Shinde said. The cabinet endorsement came after a detailed presentation made by MMRDA Commissioner SVR Srinivas to the Chief Minister on Friday evening. Subsequently, Shinde decided to take up MMRDA’s loan proposal at today’s cabinet meeting.

Already, the Versova-Andheri-Ghatkopar metro has been operational since 2014 while line 2A and line 7 were recently inaugurated. The construction of lines 2B, 4, 4A, 5, 6, 9 and 10 are ongoing projects while MMRDA will take care of the development of line 11 (Wadala-Chhatrapati Shivaji Maharaj Terminus), line 12 (Kalyan Dombivli Taloja ), Line 13 (Shivaji Chowk Virar), Line 14 (Kanjurmarg Badlapur). In addition, the Thane-Borivali tunnel route (Rs 10,000 crore) and the Thane coastal route (Rs 1,400 crore) will also be taken in due course.

MMRDA and former government Maha Vikas Aghadi predicted that the Mumbai Trans Harbor Link project would be commissioned by December 2023.

It is worth mentioning here that the credit rating agency India Ratings and Research (Ind-Ra) in its analysis conducted in October 2021 stated: “MMRDA is financing project related expenses through a combination of loans from the Agency Japan International Cooperation, other multilateral funding agencies, as well as its own resources. In an environment of significant borrowing needs, MMRDA’s debt servicing capacity will remain a key rating consideration. The funded projects are at various stages of development. These would begin commercial operations spread over a period of time, and thus generate medium and long-term income. Ind-Ra will monitor MMRDA’s ability to comfortably service the debt from the revenue generated by the projects upon completion.”

Ind-Ra confirmed MMRDA’s long-term issuer rating at ‘IND AA-‘ with a stable outlook. According to the agency, timely completion of ongoing and planned projects without significant time and cost overruns, resulting in improved credit metrics, could result in positive rating action. However, a sustained deterioration in earnings and an unexpected increase in debt levels, leading to deterioration in credit metrics, could lead to a negative rating action.

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