With Metro rail projects worth nearly Rs 50,000 crore lined up for execution in Mumbai over the next decade, the World Bank has evinced interest in funding these works at competitive rates, thus opening up more financing options for the city’s development authority.
Officials said World Bank loans had been more expensive so far as compared to other international funding agencies such as the Japan International Cooperation Agency (JICA). For the Rs 23,126-crore Colaba-Bandra-Seepz Metro, the Mumbai Metropolitan Region Development Authority (MMRDA) had sought a loan for more than half the project cost from JICA at a nominal rate of 1.4 per cent.
U P S Madan, metropolitan commissioner at the MMRDA, said, “We had an informal discussion with officials from the World Bank about a month ago and they have shown interest in our Metro projects. The World Bank has said it will give loans on a similar interest rate as JICA’s.”
As per MMRDA’s prior experience, the World Bank interest rates have been stiffer. The World Bank had partially financed the Mumbai Urban Transport Project (MUTP), which enhanced the capacity of the city’s suburban railway and road transport network.
“The World Bank loan for MUTP came in two components — a loan for the civil works, which was on the higher side at about 4-5 per cent, and another for the rehabilitation and resettlement of project-affected families. The second component, part of their special social development fund, was about 1-1.5 per cent. However, it came to us from the government as one basket at a rate of 9 per cent, including the hedging for foreign exchange variation,” Madan said.
He added that the development authority would decide on the financing agency for the Metro projects after consultations with the Union finance ministry. “The finance ministry generally has a cap on the amount that can be borrowed from a single funding agency. We will consult the ministry and decide accordingly,” he said.
Besides the 33.5-km Colaba-Bandra-Seepz Metro for which JICA has granted a loan, the MMRDA is looking to execute two more Metro rail projects.
The 40-km Dahisar-Bandra-Charkop underground Metro will cost around Rs 28,900 crore. The stretch was originally planned as two elevated lines — 32-km Charkop-Bandra-Mankhurd pegged at Rs 7,660 crore and 7.8-km Charkop-Dahisor, estimated to cost Rs 4,680 crore.
Simultaneously, the MMRDA is also preparing to get the Thane-Wadala-Kasarvadavali Metro under way as a partially underground corridor at a cost of Rs 22,000 crore. This Metro stretch was originally planned as a Ghatkopar-Mulund line and was later reconfigured as the Wadala-Thane Metro and extended to Kasarvadavali considering the exponential growth of Thane city.