Home > industry > Mumbai-Nagpur expressway misses October deadline due to slow land acquisition

Mumbai: Maharashtra chief minister Devendra Fadnavis’s dream project to build a 700-km expressway linking Mumbai to Nagpur has run into a familiar villain: land acquisition.

Work on the Rs46,000 crore project is now expected to begin in January or February next year, Bhushan Gagrani, vice-chairman and managing director Maharashtra State Road Development Corporation (MSRDC) said. MSRDC is a state government entity which is the nodal agency for the project. The original target was to complete at least 80% of land acquisition by September and start work in October.

Gagrani said so far, only 1,000 hectares of the 8,400 hectares required for the expressway had been acquired. Beyond this, another 1,600 hectares will be required along the expressway to develop wayside amenities and infrastructure. The corporation is looking to complete the project by end 2020.

The expressway, called the Samruddhi Corridor (prosperity corridor) for its aspiration to bring prosperity to the economically backward regions of Vidarbha and Marathwada, is Fadnavis’s pet project. The chief minister belongs to Vidarbha and has staked enormous political capital on this project which will cross 10 districts, seven of them in Vidarbha and Marathwada, and connect another 14 districts with ports and national highways.

Land acquisition for the project began on 13 July. Maharashtra government has claimed that MSRDC is paying one of the highest ever compensation for any public infrastructure project in India for the Mumbai-Nagpur expressway and the compensation was directly being deposited in the land owner’s bank account within hours of sale deed being signed. Collectors of all the districts the expressway will cross have notified compensation rates after a Joint Measurement Survey of 371 of 392 affected villages.

Gagrani said Indian banks which have agreed in-principle to finance the project have demanded the government acquire at least 80% of the total 8,400 hectares before they release funds. “We hope to acquire 80% land by January-February next year by when we aim to start the work," he said. He said opposition to the project was now limited to seven villages in Amravati district in Vidarbha, four to five villages in Nashik district, and some villages in Aurangabad district in Marathwada. “Even this opposition is not to the land acquisition itself but the valuation of the land. This can be sorted out," Gagrani said.

Earlier this month, a delegation led by chief minister Devendra Fadnavis visited South Korea to request the South Korean government to help finance the project. Gagrani, who was part of the delegation, said the agreement that Maharashtra signed with the South Korean government says South Korea was ready to lend a total $10 billion for infrastructure projects in India and MSRDC’s requirement was $5.5 billion.

On Tuesday, the Maharashtra cabinet approved setting up of a subsidiary company named Nagpur-Mumbai Super Communication Expressway Ltd which would function as a special purpose vehicle (SPV). “The setting up of this subsidiary was necessary to put in place the financial structure for the project. The MSRDC cannot have the project on its balance sheet and this has to be done through a subsidiary. This subsidiary will now be tasked with raising loan or equity to fund the project and it will work under MSRDC," Gagrani said.

Earlier this month, Fadnavis held talks with Indian bankers to iron out issues raised by them. A senior official at the chief minister’s office, who requested anonymity, said apart from the condition of 80% land acquisition, the banks had also put forth other conditions. “They want that credible engineering and procurement contractors be awarded the work and there should not be a delay in execution. One major condition is also that the project should continue to get the political support it currently enjoys. This cannot be assured on paper and depends on the political climate," the official said.

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