MRVC mulls approaching other banks as World Bank cites issues with institutional arrangement

The railway budget sanctioned Rs 519 crore for 2018-19 for the project. (File)

After the World Bank cited “problems with the institutional arrangement” in the way projects are handled, the Mumbai Railway Vikas Corporation (MRVC) may ask other financial institutions to fund railway projects under the Mumbai Urban Transport Project-III (MUTP-III).

Projects under MUTP-III, with Rs 10,085 crore net worth, include a quadrupling of the Virar-Dahanu corridor, Panvel-Karjat suburban corridor and the Airoli-Kalwa Link. The railway budget sanctioned Rs 519 crore for 2018-19 for the project. Earlier, the World Bank (WB) was expected to loan close to Rs 7,000 crore, while the state and the central governments were expected to share the remaining Rs 3,000 crore for the project.

However, the WB specifically wants to include Panvel-Virar corridor project worth Rs 7,089 crore in MUTP- III. “They have even cited issues with the institutional arrangement in the way projects are handled. They ask for an independent corporation which can oversee suburban railway projects for Mumbai. As they demand inclusion of the Panvel-Virar corridor in the third part of transport projects, we have sent a similar request to the Railway Board,” said Sanjay Singh, spokesperson of MRVC.

In response, the WB said, “We have received a request and are in discussions to identify how Bank’s limited resources can best be used to strengthen urban transport services and institutions in Mumbai.” Officials said that they are in talks with the Asian Infrastructure Investment Bank (AIIB) to partially fund MUTP-III.

Prime Minister Narendra Modi recently promoted AIIB to fund infrastructure projects in the country. The MRVC is also keen to seek help from the Indian Railway Finance Corporation (IRFC) to fund the amount. “We may ask the IRFC to grant us close to Rs 3,000 crores for the project. This would help reduce the loan amount from the sum.

As AIIB would loan Rs 500 crore, the remaining could be taken from the WB,” a senior MRVC official said. The MRVC has taken a loan of Rs 1,602 crore from a total project cost of Rs 4,452 crore for MUTP-I and Rs 1,750 crore from Rs 8,087.11 crore for MUTP-2 A from the WB. The loan was repaid to the banks by paying a surcharge on the ticket fares.