Urban renewal scheme may fund city‘s metro project

NEW DELHI: Anil Dhirubhai Ambani Group (ADAG)-promoted Rs 2,356-crore Mumbai Metro One project is likely to be cleared soon sans viability gap funding (VGF). The proposed 11km Versova-Ghatkopar metro line project was waiting approval of finance ministry for the VGF.

The financing of the project would now be done through project finance scheme of Jawaharlal Nehru National Urban Renewal Mission (JNNURM) instead of bringing it under the VGF scheme, a senior official in the finance ministry told ET. This would be the first mega project funded under the JNNURM.

“If the bids are invited prior to the notification of the VGF scheme, then such projects will not be considered under the scheme,” the official said. The bid was awarded to ADAG in early 2006, while VGF provisions were made in July, 2006. The corridor will be built by Reliance Energy (REL) and Mumbai Metropolitan Region Development Authority (MMRDA) at a cost of Rs 2,356 crore, the first east-west corridor will traverse from Versova-Andheri-Ghatkopar route.

REL and MMRDA will share the project cost for this corridor. Reliance will have 74% and MMRDA 26%. The project will run on a build-own-operate-transfer (BOOT) basis and is expected to go on full swing soon. The state government's share in this mega project will work out to Rs 1,340 crore.

The state government has also proposed to build eight more corridors under the mass rapid transit system (MRTS) project for Mumbai. Sources in the government have indicated that these new corridors can be posed under the VGF scheme administered by the DEA. ADAG has quoted a price of Rs 220 crore per km of metro rail track.