MMRDA starts talks with banks for trans-harbour link
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While the bid process for Mumbai Trans Harbour Link (MTHL) is under way, MMRDA has started talks with banks to help the winner secure debt.
It is also in the process of securing a long-term loan for the bidder for roughly 20 per cent of the project cost from Indian Infrastructure Finance Company Limited (IIFCL).
Securing loan for the link, where traffic will depend on future growth on mainland, was a concern aired at a pre-bid meeting on February 15.
"Although it is the concessionaire's responsibility to arrange debt, we are trying to sensitise banks on the risky project," said Ashwini Bhide, additional metropolitan commissioner.
MMRDA has so far held talks with IDBI Bank and SBI and will soon discuss the project with Housing and Urban Development Corporation.
"We have started talks with banks as a confidence-building measure. This will facilitate early financial closure. We are saying financial closure should happen in six months after selecting a bidder, but it can take up to a year as banks need time to appraise the project before deciding to lend," Bhide said.
MMRDA plans to selected a bidder by May or June and start construction by yearend.
The 22-km link, which has been through two failed rounds of tendering, will be constructed at a cost of Rs 9,630 crore. The state and central governments bear 40 per cent of the cost and the consortium chosen to execute the project will have to put in the rest.
To help reduce government, MMRDA has requested IIFCL to give a longer tenure for loan repayment and some moratorium on principle.
"They will positively consider this and are also willing to give a comfort letter to bidders. A longer tenure and moratorium can possibly decrease the viability gap funding requirement," Bhide said.
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