Manmohan Singh signals rethink on Mumbai rail project
Maharashtra chief minister Prithviraj Chavan met Singh for a review of infra projects in Maharashtra on Wednesday
In what is a setback for the railway ministry’s ambitious ₹ 20,000 crore Mumbai elevated rail corridor project, Prime Minister Manmohan Singh has ordered a fresh traffic study for the project after a meeting with Maharashtra chief minister Prithviraj Chavan.
Chavan met Singh for a review of infrastructure projects in the state on Wednesday. “It was agreed that a fresh traffic study would be conducted taking into account the traffic capacity being created by the new Mumbai Metro line, which is partially on the same alignment," the Prime Minister’s office said in a statement. “The modalities on moving ahead with the project would also be finalized soon after that."
The decision is likely to not only delay the project but also puts a question mark on its future, said a railway official. “It appears that since the PM has said modalities on moving ahead will be decided after the fresh traffic study it raises questions about the viability of the project," the official said, requesting anonymity. “But we will have to wait for the minutes of the meeting to be released to understand better what was decided."
The railways ministry has been in negotiations with Maharashtra for at least one and a half years to resolve issues regarding the state’s support agreement. The elevated rail corridor project is among the projects being monitored by a steering committee set up by Singh in July to fast-track key infrastructure projects.
The railway ministry had opened the request for qualification (RFQ) for the project in August. Eight companies had bought the RFQ for the project, which includes Reliance Infrastructure Ltd, Gammon India Ltd, Larsen and Toubro Ltd (L&T), Infrastructure Leasing and Financial Services Ltd (IL&FS), GMR Infrastructure Ltd, Construcciones y Auxiliar de Ferrocarriles (CAF), Siemens AG and Tata Realty and Infrastructure Ltd, Mint reported on 3 September. The date for closing the RFQ, scheduled for 29 November, is likely to get postponed, the official said.
The ministry had estimated 1.1 million of passengers per day that would bring ₹ 1,740 crore in revenue in the first year of operation of the rail corridor in 2020. It had provided for viability gap funding of 20% of the total project cost and development of commercial real estate to make the project financially viable.
“There is a political tendency to announce big projects and calling for bids only to realize later that those were not viable under the PPP (public-private partnership) mechanism," said Vinayak Chatterjee, chairman and managing director, Feedback Infrastructure Services Pvt. Ltd, an infrastructure consultancy. “It is good that the government has now started taking a more serious and harder look into the viability of the projects at the initial stages of conceptualization."
“Apart from projections about the commuter numbers, we have various other concerns, which we had raised from time to time and in this light, announcement by the Prime Minister’s office to conduct the traffic study is a welcome move," said a senior Mumbai Metropolitan Regional Development Official (MMRDA), who did not want to be identified.
“The elevated rail corridor project is going to compete with two metro lines planned by the state government between Cuff Parade in South Mumbai and Santacruz Electronics Export Promotion Zone (SEEPZ) and another line between Charkop a western suburb of the city and Mankhurd an eastern suburb," he added.
Makarand Gadgil contributed to this story.
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