Mumbai-Nagpur Expressway project
In a controversial move, the Maharashtra government plans to allow private partners investing in the construction of the 701-km Mumbai-Nagpur Samruddhi Corridor i.e. Mumbai-Nagpur Expressway project the right to commercially exploit the road for 40 years.
The Mumbai-Nagpur Expressway project, which also involves the development of 25 new towns, is seen as Chief Minister Devendra Fadnavis’s pet infrastructure project. It is to run through 10 districts, 26 talukas and 390 villages.
On Tuesday, the state PWD tabled the draft of the concession agreement for the construction of the project before the state Cabinet. The agreement grants the concessionaire the right to collect user fees by levying toll for 40 years.
The state finance department has already raised a red flag over the period of concession. On the basis of the estimates of vehicular traffic that would use the corridor and the land development component, it has contended that the concessionaire would be in a position to recover the costs and earn reasonable profit within 10 years of operation. The concession of period should be restricted to 15 years at most, it had maintained. The state’s fiscal managers have also cautioned that in the past, the government has courted criticism for entering into concession arrangements that were seen as unduly favouring the private party.
Even before the project is tendered out, the estimated cost of the project has shot up from Rs 45,452 crore to Rs 49,247 crore. With the government setting an ambitious two-and-a-half year target for the completion of the construction work, the state-run Maharashtra State Road Development Corporation Limited (MSRDC) — the project’s nodal agency — has proposed to raise Rs 35,000 crore in loan from banking institutions and global lending firms. While the capital cost in the project was previously expected to be around Rs 11,000 crore, this is now expected to go up.
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