After receiving no bids from private companies for the marquee Mumbai Trans Harbour Link (MTHL) project, the Mumbai Metropolitan Region Development Authority (MMRDA) is now considering other options for constructing the R9,630-crore project.
Two possible options being considered include taking the engineering, procurement, construction (EPC) or annuity routes. The state may also ask for the project cost to be shared under the Jawaharlal Nehru National Urban Renewal Mission (JNNURM), with MMRDA and public toll collections contributing to the overall cost.
The state government may also explore the possibility of getting MTHL declared as a national project, which would then make the Union government a majority partner in it. Approaching international financial institutions like Japan International Cooperation Agency (JICA) and World Bank for funding is also being explored.
MMRDA, the implementing agency for the project, will soon be discussing these five options with the government of Maharashtra to pick the most viable option to take the project ahead.
“MMRDA is determined to implement MTHL, but since no bids have come from shortlisted bidders, one of these five options will now need the state government’s consent,” says Dilip Kawathkar, joint project director, MMRDA. He said that MMRDA should be able to finalise a new plan to implement the project in a months? time.
This is the third time that MTHL’s bids have failed to attract any response. In 2005, Maharashtra State Road Development Corporation (MSRDC) invited bids for the project, but there was a huge difference between the concession period proposed by MSRDC and the period demanded by the contractors. Companies led by industrialists Mukesh Ambani and Anil Ambani were initially in the race for it, but the bids were cancelled in 2007. MSRDC then decided to implement MTHL on cash contract in 2008 and invited bids, but did not receive a single bid. In 2009, the project was handed over to MMRDA.
This time, too, after asking for revision of the bid date twice, which was originally set for May 2013, the shortlisted bidders did not bid for the project by Monday, the last day. One of the shortlisted bidders, IRB Infrastructure, had already pulled out of the project last week citing unfavourable experience with its another state government road project in Kolhapur. Other bidders included GMR Infrastructure, Gammon Infrastructure, SREI and Tata Realty and Infrastructure.
While the bidders kept saying they needed more time to frame their proposals, officials in MMRDA say the companies were finding it tough to raise funds from lenders due to the uncertain economic environment. A senior official in one of the shortlisted consortiums told FE that banks were sceptical on revenue generation from the project due to uncertainties around traffic.
The bidders, during the pre-bid meeting itself, had raised concerns that since 15-20% of the traffic to ply on MTHL was on account of the proposed Navi Mumbai airport project, its unclear fate may lead to a fall in traffic and revenues in the project?s initial years itself. To address these concerns, the government had incorporated changes to the request for proposal. It said in case traffic falls below the 80% estimate, an additional sop of R963 crore or 10% of the project cost will be provided as loan to the concessionaire to service his existing debt.
Earlier this year, the government of India had already sanctioned viability gap funding for MTHL to the tune of R1,920 crore.
The alternatives
* MMRDA might take the EPC or annuity route, or ask
for the project cost to be shared under JNNURM
* The state government may also try to get MTHL declared as a national project, in which case the
Centre would become a majority partner in it
*Approaching international financial institutions,
such as Japan International Cooperation Agency
and World Bank, is also being explored
