The cost of the Sewri-Nhava Mumbai Trans Harbour Link (MTHL), which has had a few false starts, has escalated by more than Rs 1,300 crore since the state government’s showpiece project went off-track once again last year when not even a single company bid for it.
Overall, the cost of constructing the 22-km harbour link, billed as the longest sea-link in the country, has so far surged about 175 per cent since 2005, when the state government first attempted to invite bids for the project.
UPS Madan, metropolitan commissioner at the Mumbai Metropolitan Region Development Authority (MMRDA) said, “The cost has now increased because we re-evaluated the project based on prices prevailing in 2014. Earlier, the project cost was based on the prices of 2012-13. As per the latest prices, the project will cost about Rs 11,000 crore.”
The MMRDA has mentioned the revised cost of the project in its proposal, vetted by the state government, that has been submitted to the Union government to avail of a loan from the Japan International Cooperation Agency (JICA) to construct the MTHL on a cash-contract basis.
The project was conceived more than three decades ago, but the first attempt to invite tenders was made in 2005, when the Maharashtra State Road Development Corporation (MSRDC) had valued the MTHL at about Rs 4,000 crore.
Tenders floated to construct the harbour link on a public-private partnership drew only two bids, both by the Ambani brothers, which were ultimately found to be unreasonable and did not work out. When the MSRDC tried to bid out the project for the second time as a cash contract in 2008, the cost was revised to about Rs 6,000 crore. However, no company responded to the tender despite showing initial interest.
In 2011, the state government handed over the mandate of the project to the MMRDA, which then decided to take it up on a public-private partnership model, pegging the project cost at Rs 8,800 crore. However, when it invited financial bids from the shortlisted consortia, the authority revised the project cost to reflect current prices to Rs 9,630 crore.
After the project failed to draw bids last year in the third round of tendering, the MMRDA decided to scrap the public-private partnership model for the project and implement it instead on a cash-contract basis, with JICA having shown willingness to finance it.