MMR Requires 3 Lakh Crore For Infrastructure Projects by 2021
The Mumbai Metropolitan Region (MMR) will require about Rs. 3 lakh crores by year 2021 for its infrastructure projects including airports, highways, ports and municipal infrastructure. However, raising funds for these projects will be a Herculean task.
According to the metropolitan commissioner of MMRDA, the state authority responsible for infrastructure development in MMR, the state body will be responsible for raising a major chunk of these funds for the infrastructure projects, which would be a huge burden for it. According to him, of the 3 lakh crores, the government authorities will be expected to raise 22% while state-run authorities would have to contribute 29%, and 21% would have to be obtained through loans. Public-Private Partnerships (PPP) is expected to contribute the remaining 28% of the funds.
The current situation is however not so encouraging when it comes to Public-Private Partnership for infrastructure projects in Mumbai. Several recent projects either failed to take off or halted suddenly due to multiple disputes between the private and government entities, especially after the tendering process, which resulted in re-tendering of these projects. All these projects are multi-million dollar projects.
Few such major projects were the Mumbai Trans-Harbour Link project (MTHL), Mumbai monorail project, Worli-Haji sea link project and the second phase of Mumbai metro. The Rs. 10,000 crore MTHL project failed to attract any bids for the third time in the last eight years. This has forced MMRDA to look for other options for raising funds. The Worli-Haji Ali sea link is a Rs. 4,500 crore project, whose contract was signed between Reliance Infrastructure and MSRDC, but failed to commence due to various disputes.
Reliance Infra also refused to work on phase-2 of the Mumbai metro project citing different reasons, while the Mumbai monorail which is to be implemented by a consortium of L&T and Scomi Engineering is facing various major hurdles. The projects are worth Rs. 5,000 crore and Rs. 203 billion respectively.
Failure of these projects on PPP basis has forced MMRDA to look into other possible options to take these projects off the ground. The Maharashtra state government recently decided to set up a dispute resolution authority to tackle such issues. However, considering the recent hurdles MMRDA faced with its infrastructure projects, there will be a lot more effort to raise the required 3 lakh crore for its future projects.
