Mumbai's Six Key Metro Corridors Set To Benefit As Maharashtra Government Clears Path For MMRDA To Secure Foreign Loans

The Maharashtra government has approved a new financing framework to enable the Mumbai Metropolitan Region Development Authority (MMRDA) to borrow loans from foreign financial institutions against six under-construction Metro corridors, The Indian Express reported.

These projects include Metro Line 5 (Thane-Bhiwandi-Kalyan), Line 6 (Swami Samarth Nagar-Vikhroli), Line 7A (Dahisar East to Mumbai Airport), Line 9 (Dahisar East to Mira Bhayander), Line 10 (Gaimukh to Shivaji Chowk, Mira Road), and Line 12 (Kalyan to Taloja).

The state will provide contingent liability backing for MMRDA’s loans from bilateral or multilateral organisations or other financial institutions, according to the government resolution cited in the IE report.

The borrowing can occur on a back-to-back basis or other appropriate methods, with likely concessional interest rates, according to the resolution.

Despite the state previously clearing these lines in earlier Cabinet decisions, hurdles in tapping foreign-assisted financing reportedly prompted the state government to intervene.

The resolution clarifies that MMRDA would primarily be responsible for repaying the interest, fees, and principal amount of the loan.

However, in case of default or exceptional circumstances, the state will act as guarantor and pay the dues.

Additional financial burden owing to delay, cost overruns for litigation, or other unexpected reasons, will be borne by the MMRDA, not the state.

“This backing by the state government provides funding certainty and enables us to go ahead with loan arrangements needed for these important infrastructure projects," an MMRDA officer was quoted as saying in the IE report.

Further, the resolution authorises the MMRDA and the Urban Development Department to execute loan agreements with banks and project and financial agreements with the Centre, wherever necessary.

These agreements will specify the repayment schedule, interest payments, and conditions tied to the external financial assistance.

According to the MMRDA official, the loan process was at an advanced stage, but needed the state to intervene for guarantee and risk mitigation.

"With this clearance, we are getting closer to arranging the funds and completing project timelines," the official added.

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