Mumbai: Around 7 trillion rides on the Shiv Sena-led Maharashtra government’s decision to review several high-profile infrastructure projects approved by the previous government, with a cabinet meeting on Tuesday putting many of them under the scanner.

Maharashtra chief minister Uddhav Thackeray had said on Sunday that his government has ordered a review of infrastructure projects as part of a wider audit and to determine priorities for his new government.

The fact that Mumbai is the financial capital of India and the projects include some big-ticket numbers, coupled with uncertainty about the new regime’s plans, have made some businesses jittery.

The government has already indicated that it is not keen on the 5 trillion refinery and petrochemicals complex in Raigad and the 1.2 trillion Mumbai-Ahmedabad bullet train.

Other projects under review are the Aarey metro car shed project (over 15,000 crore), Mumbai-Nagpur Samruddhi Corridor ( 46,000 crore), a coastal road connecting south Mumbai with the city’s western suburbs ( 12,000 crore), and a third bridge on the Thane Creek ( 800 crore), reported Mumbai Mirror.

A senior official from the Maharashtra government said: “The chief minister and his cabinet reviewed all the metro projects, the Navi Mumbai Airport and the Mumbai-Trans Harbour Link project, among others, this evening. The review they took included an update on the timeline of the project, when was it approved, the progress so far, the expenditure so far and how much more money is required to complete these. Review need not necessarily mean these projects would be axed." He spoke on condition of anonymity as he is not allowed to speak to the media.

(Graphic: Sarvesh Kumar Sharma/Mint)
(Graphic: Sarvesh Kumar Sharma/Mint)

According to a PTI report, Thackeray said after the meeting that no project has been halted yet, and that only the Aarey car shed has been stayed.

The Shiv Sena’s past opposition to the Japan-backed bullet train project and the refinery project stems from its support to protesting farmers, who fear their land will be acquired for the projects.

At the same time, the bullet train is Prime Minister Narendra Modi’s pet project, largely financed by a long-term and low-cost loan from Japan—a country with which India enjoys warm ties and which has emerged as an increasingly significant strategic ally.

Japan International Cooperation Agency has agreed to fund 81% of the project cost ( 88,087 crore), through a 50-year loan at a concessional interest rate of 0.1%. The remaining cost is to be borne by the Maharashtra and Gujarat governments.

Bharatiya Janata Party (BJP) was in power in both Maharashtra and Gujarat when work on the bullet train project began in 2017, and the Shiv Sena’s recent rivalry with BJP is another factor that may upset investors’ calculations. The construction work on the rail line is supposed to begin by March 2020.

The 5 trillion refinery and petrochemicals complex, announced in December 2015, is important for India’s energy security. Christened Ratnagiri Refinery and Petrochemicals Ltd, the refinery was to be completed and commissioned by 2022. However, four years on, the government is yet to acquire land and the deadline for completion has been pushed to 2025.

The 60 million tonnes per annum capacity refinery assumes further significance as it is a joint venture between Saudi Aramco, Abu Dhabi National Oil Co. (Adnoc) and three domestic state-owned oil marketing companies— Indian Oil Corp. Ltd, Hindustan Petroleum Corp. Ltd and Bharat Petroleum Corp. Ltd. Saudi Aramco and Adnoc will jointly own 50% of the refinery, with the remaining owned by the Indian oil companies.

A pre-feasibility study of the refinery was completed in January. The refinery will be capable of processing 1.2 million barrels of crude oil per day and produce 18 million tonnes per annum of petrochemicals, along with providing jobs—direct and indirect—to about 150,000 people.

The Shiv Sena is not alone in its intent to review mega projects. The government of Andhra Pradesh drew criticism from France, Canada and Japan last week after chief minister Y.S. Jagan Mohan Reddy decided to review agreements signed by the previous government. Their concerns centre around solar power projects and the tenders for building the state’s glitzy new capital, Amaravati.

To be sure, the Centre and the Andhra Pradesh government have now reached an agreement not to revise previous power purchase agreements, whose tariffs have been fixed by the state electricity regulator.