MAKING AN exception for the “pet” project of Chief Minister Devendra Fadnavis, the Nagpur-Mumbai ‘Samruddhi Corridor’ Expressway, the Maharashtra Cabinet on Tuesday sanctioned a proposal to give a Rs 4,000-crore government guarantee to the project.
The guarantee was extended to allow the Maharashtra State Road Development Corporation (MSRDC), the project’s nodal agency, to raise a loan of Rs 4,000 crore for the project’s consortium.
While a consortium of banks led by the State Bank of India, has agreed to provide finance for the ambitious express highway project, sources said the lenders had insisted on a government guarantee, given the tight fiscal health of the corporation.
The 700-km project is worth Rs 50,000 crore. According to MSRDC’s estimates, about Rs 26,000 crore is required for the construction work. The agency was falling short of Rs 4,000 crore to reach this target, and have now decided to raise a loan to meet it.
With the debt mounting on the exchequer, the state’s finance managers had earlier adopted a fiscal policy, where it was decided to keep funding of big-ticket infrastructure projects outside the government’s budget. The state’s fiscal managers had adopted a strategy of not extending government guarantees and subsidiary loans for funding such projects. The government’s liabilities or unpaid debt burden is projected to soar to Rs 4.72 lakh crore by March 2020. Further, the contingent liabilities have also crossed the Rs 4 lakh-crore mark, sources said.
After agreeing to extend a subsidiary loan to some Metro rail projects, the government has now also made an exception from the policy for the Samruddhi Corridor in a bid to fast-track the implementation of the project.
Sources said the chief minister was keen on performing the bhoomipujan for the project before the model code of conduct for the Assembly elections kicked in.