Centre allows 10% additional loan cover to Rs 9,630-cr Mumbai Trans-Harbour Link

MUMBAI: The Centre today approved a 10 per cent cover to the operator of the Rs 9,630 crore Mumbai Trans-Harbour Link (MTHL) project by way of bank loans.

The move will help the concessionaire, or operator of the project, secure bank funds as and when the project gets moving and this is over and above the 15 per cent viability gap funding for any large infra projects.

It means that after project commissioning, if traffic falls below the 80 per cent estimate, the concessionaire can take an additional 10 per cent bank funding to service his existing debt.

"The Empowered Committee of the Department of Economic Affairs has approved a 10 per cent short-fall loan to the MTHL concessionaire. The committee has arrived at this decision to make the project bankable and financially more viable," MMRDA, the implementing authority of the project, said in a statement this evening.

The 10 per cent additional sop works out to be Rs 963 crore of the Rs 9,630 crore project, and will be available to the concessionaire as loan only in case the traffic falls below 80 per cent of the projection on the sealink.

"This move will ensure the bankers' debt service obligations are met, should the projected traffic on the link falls below the projected 80 per cent mark especially during the initial seven years of operations," the authority said.

It is expected that about 60,000 vehicles will travel daily on the 22-km link that will connect Sewri in the island city to Nhava in Navi Mumbai. Once completed, this will be the largest bridge in the country.

In January, the Centre had sanctioned the viability gap funding to the tune of Rs 1,920 crore.

"This is a very crucial decision as far as the bankability and economic feasibility of the MTHL is concerned," Additional Metropolitan Commissioner Ashwini Bhide said.

She further said it will also help the state government to make available the vital infrastructure for better communication and connectivity to the city and the development of the surrounding area.

The Centre has further included a provision of a charge on escrow account and also added the exit option for the investors during the lifetime of the project, the release said.

The project is at pre-EPC bid level and is awaiting security clearance from varios union ministries.