The state government has decided to start work on the Nagpur-Mumbai Super Communication Expressway from October this year. The eight-lane project comprising 25 townships, called the Maharashtra Prosperity Corridor, will be completed over a period of 36 months. The government has tied up with financial institutions for the Rs 24,363-crore equity required for the civil construction of the 706-km road between Nagpur and Mumbai.
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Chief Minister Devendra Fadnavis on Wednesday discussed the financial model and steps to expedite the project that promises to bridge the urban-rural divide through agro-industries. To be built under the land-pooling model, the total land required for the project is 10,463 hectares, of which 9,500 hectares is private land and the rest 963 hectares government or forest land. Consent has been obtained for 45 per cent of the total land.
A highly placed source told The Indian Express, “The conservative estimate of toll revenue for the project in the first year of its operation is estimated at Rs 1,082 crore.”
This is substantially on the lower side for a 706-km Nagpur-Mumbai road, as compared to the Mumbai-Pune Expressway, which is expected to earn Rs 1,035 crore in the same year for a 95-km stretch. The project will be implemented by a special purpose vehicle (SVP), a subsidiary of the Maharashtra State Road Development Corporation.
To meet the equity requirements and cash shortfall during the initial period of the project, the MSRDC has decided to monetise the land parcels. The sale of the available Bandra land area of 12 acres will generate Rs 14,400 crore; Nepaensea Road area of 1.5 acres Rs 1,800 crore; MPEW land of 1,000 acres Mumbai-Pune Expressway Rs 2,000 crore.
The project cost and means of finance is as under: Land acquisition Rs 5,500 crore debt / civil construction Rs 24,363 crore equity / node development Rs 2,500 crore / utility shifting insurance and contingency Rs 768 crore / IDC and financing costs Rs 4,485 crore. The total project cost is estimated at Rs 37,833 crore.
The debt for the project will be raised from banks / financial institutions under RBI guidelines dated July 15, 2014 for a door-to-door tenor of 28 years, including four years construction period of three years principal moratorium and 21 years of repayment. The initial tenor of the debt shall be for a shorter duration (10 years) at the end of which it shall be refinanced in line with the balanced amortization schedule. The MSRDC will hold at least 51 per cent equity share capital of the borrower during the tenor of debt.