After much delay, the Prithviraj Chavan-led cabinet Wednesday gave its nod to the fully underground Mumbai Metro-III service, which is touted as one of the costliest infrastructure projects in Mumbai.
It also granted a go ahead to the state administration to hike stamp duty on property transactions in the Mumbai Metropolitan Region (MMR) by another 1 per cent to fund major urban transportation projects like the proposed Metro and Monorail corridors.
With this, the stamp duty in Mumbai will now be 6 per cent and in other MMR areas, 7 per cent. A similar decision was earlier taken for raising resources for Pune and Nagpur metro corridors.
To raise resources for the Metro project, the government will collect a betterment charge from construction projects within 500 m of the transport corridor, while offering them additional floor space index (FSI) of up to 4 on payment of premium at 100 per cent of the ready reckoner rates.
Construction projects – including the ones for redevelopment – will be doubly hit with the government citing the same reason for proposing hike in development charges from such projects.
During the cabinet meeting, Congress minister Naseem Khan raised the flag over the stamp duty hike. State officials however reasoned that it was as per Union government’s guidelines.
The Metro service is to run along the 33.5-km long Colaba-Bandra-Seepz route, and estimated to cost Rs 23,136 crore.
The underground Metro service was earlier meant to be built under PPP but the plan was deemed financially unviable and scrapped. Under the new model, about 57 per cent of the project cost will be raised through a loan from Japanese Investment Corporation Agency (JICA). The state and the Centre will contribute Rs 2,403 crore each in equity. Another 1,650 crore will be raised through subordinate debt and taxes. The revenue collected through hike in stamp duty, development charges and betterment charge will be used to raise another Rs 1,000 crore for the project. The finance department had raised concerns regarding the financial model.
The cabinet’s clearance was also essential for re-constitution of the Mumbai Metro Rail Corp (MMRC) as a joint venture between the state government and the Union government as per the latter’s conditions, and the installation of a fresh board of directors to take key decisions about the project.
The process of pre-qualification bids for the Colaba-Bandra-Seepz Metro was held up for nearly four months between October and January, as senior MMRDA officials were awaiting the cabinet’s nod for the reconstitution of the MMRC. The development authority had invited pre-qualification proposals in September. The last date for the submission of pre-qualification bids is now March 10.