MUTP-II may be funded privately

MUMBAI, August 25: The Mumbai Rail Development Corporation (MRDC), set up to implement the rail component of Mumbai Urban Transport Project...

MUMBAI, August 25: The Mumbai Rail Development Corporation (MRDC), set up to implement the rail component of Mumbai Urban Transport Project (MUTP) II, has kept the option of private participation in case the World Bank refuses to sponsor the project.

The MRDC, awaiting the Central cabinet’s approval, will be a company with an equity base of Rs 100 crore, held between the Railways (51 per cent) and the state government (49 per cent). According to sources in Mumbai Metropolitan Region Development Authority (MMRDA), depending on whether the WB agrees to sponsor the project or not, the company can then borrow money from the market.

MMRDA sources estimate that if the WB dissociates itself from the MUTP-II, it could still go ahead with its railway projects with an exclusive annual fund of Rs 350 crore. The estimation goes like this: MRDC would demand a greater share in the budgetary allocation of the Railways for the city.

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While the present share of the metropolis is about Rs 50 to Rs 60 crore, the MRDC will be seeking Rs 100 crore from the Ministry of Railways. An additional Rs 100 to Rs 150 crore will be sought from the Planning Commission and a surcharge, like the ones levied on travel to Navi Mumbai, would ensure a revenue of Rs 100 to Rs 150 crore.

However, this option would result in project delay. “If Rs 350 crore per year is not sufficient to execute the project in five years, it would increase to seven to eight years,” say MMRDA sources. The MRDC will also have the power to commercially develop the railways space in the Mumbai metropolitan region and plan for the relocation of th project affected.Of course, none of these permutations and combinations would be necessary if the WB agrees on its loans, once the MRDC gets its formal approval from the Central Government.

While the Bharatiya Janata Party (BJP) had claimed that the WB had drawn a deadline of August 31 for approving the MRDC, officials in the MMRDA deny that the WB has given any such time period. Officials point out that the WB had already sanctioned an extension of three months on certain preliminary studies for the MUTP-II, which were to expire on June 31. “Even by that reckoning, the deadline should be September 31,” say officials. Most of these studies are nearing completion, and recommendations for one of the main studies for the railways on the Organisation and Financial Improvements in Railways has already been received.

Once the approval is granted by the Central Government, the state government will have to give its sanction and deliberate on the financial implications of the MRDC. If the WB loan falls through, the state government would have to decide on the rate of surcharge to be levied on the passengers and its time period.

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While the MRDC is the first step, the aim is to set up a Mumbai Rail Authority which will be responsible for the railway operations in the metropolitan region.