Devendra Fadnavis discusses financial model with banks

Devendra Fadnavis

Chief Minister Devendra Fadnavis held a meeting with financial institutions Wednesday to work out the modalities of financing the ambitious Nagpur-Mumbai Supercommunication Expressway. The 706-kilometre stretch, along with 24  nodes (townships), would require Rs 37,834 crore.

Explaining the significance of the project that promises economic prosperity in 24 districts across Maharashtra, Fadnavis said: “I appeal to all the financial institutions to reckon the significance of the project and make provisions for the funds. The project would change the landscape of Maharashtra and bring economic prosperity. It would immensely help farmers across the state by giving boost to agro-industries. It would channelise the farm produce and strengthen the value-added chains helping the agriculture sector.”

A senior secretary present at the meeting said the financial institutions responded positively but raised some concerns related to the financial model. “They raised fears related to complexities in financing the EPC (engineering procurement and construction) contracts. Another aspect pointed out was inordinate delays in the completion of land acquisition process. Also, often projects of such magnitude undergo realignments leading to time and cost overrun. They said all these aspects along with the budget should be clearly worked out,” said the official.

The government plans to begin work on the project from October and has set a deadline of 2020 for its completion. The financial institutions were apprised about the progress made on the land acquisition front.  The total land required for the project is 10,462 hectares, of which 9,500 hectares are private land and the rest of the 963 hectares are forest land belonging to the government. The state has given both options of land pooling and direct cash compensation to the farmers.

The project to be implemented by a special purpose vehicle (SVP) will be a subsidiary of the Maharashtra State Road Development Corporation. CIDCO Managing Director Bhushan Gagrani, who holds the additional charge of Samruddhi Mahamarg, made a presentation at the meeting. It was stated that the state government would enter into a concession agreement with the SPV in line with the model concession agreement of the National Highway Authority of India. The construction of the project will be done through EPC contracts.  Top officials from State Bank of India, Axis Bank, ICICI, HUDCO, Bank of India, Indian Bank, Canara Bank, LIC, Yes Bank, Union Bank and Bank of Maharashtra were present at
the meeting.