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Journalism of Courage
MUMBAI, Jan 1: Maharastra State Road Development Corporation (MSRDC) will come out with a Rs 1,000 crore bond issue to finance the Mumbai-Pune Express Highway and construction of 46 flyovers in Maharastra. Rating agency, CARE (Credit Analysis and Research Ltd) has assigned a CARE `AA (SO) (double A structured obligation) rating to the proposed bond issue upto Rs 1,000 crore.
MSRDC was incorporated only in August 1996 as a 100 per cent state government undertaking with the primary objective of constructing and maintaining roads and bridges. It has been entrusted with two mega projects – the Mumbai-Pune Express Highway and the construction of flyovers in Mumbai. Both the projects are to be executived on a Build-Operate-Transfer (BOT) basis.
The repayment of principal and payment of interest on the bond would be guaranteed by the Government of Maharastra on an irrecoverable and unconditional basis. While Maharashtra is an economically strong state, it has been running deficits in the revenue account in the past and has estimated a budget deficit of Rs 5,430 crores for the financial year 1998.
According to CARE, the widening resource gap has caused a sharp increase in borrowing requirements of the state. However, the state has a higher degree of self-reliance in comparison with other states, added CARE.
The total cost of the two projects, estimated at about Rs 2800 crore, is proposed to be financed by way of contributions aggregating Rs 275 crore from the state Public Works Department (PWD) and the Brihanmumbai Muncipal Corporation, loan of Rs 600 crore from MMRDA (Mumbai Metropolitan Regional Development Agency) and the balance through market borrowings. Government of Maharashtra proposes to allot to MSRDC 1,060 hectares of land at Chowk and Dehu Road for commercial exploitation.
