A leading Canadian pension fund might pick up a stake in the Bandra-Worli sea link as Maharashtra State Road Development Corporation (MSRDC) looks to monetise the asset. The state’s road planning and development authority for special projects is looking to raise resources to fund the Bandra-Versova Sea Link (BVSL).
Radheshyam Mopalwar, V-C and MD, MSRDC, confirmed to FE that the government was in discussions with a Canadian pension for a stake in the Bandra-Worli sea link. “We are looking to raise money for the Bandra-Versova sea link because there is no scope for any viability gap funding,” Mopalwar said.
He added that the cost for BVSL is estimated at Rs 7,500 crore for which MSRDC requires a margin amount of at least Rs 2,500 crore. The net present value (NPV) of the remaining concession period — 24 more years, till 2040 – on BWSL is R2,800 crore. However, Mopalwar said banks would be comfortable only with a limited tenure of 10-15 years which would yield only about Rs 1,000 crore. “This still leaves a gap of about R1,500 crore for BVSL. This is the reason we are exploring options with the Canadian Pension funds who are longer-term investors and who have shown an appetite for road projects in India,” said Mopalwar.
The Municipal Corporation of Greater Mumbai (MCGM) is not keen on taking over BWSL from MSRDC, although MCGM had been instructed by the state government to buy the balance concession period till 2040 for R2,800 crore. Hence, MSRDC is keen on exploring its options to raise funds for the BVSL project.
The numbers of Canadian Pension funds scouting for opportunities in infrastructure in India have increased since the Canadian Pension Plan Investment Board first opened an office in Mumbai in October 2015. Subsequently, Caisse de Dépôt et Placement du Québec also opened an office in New Delhi in March this year. Then, in June, another Canadian pension fund, PSP Investments, expanded its reach in the country with the acquisition of four toll roads totalling 710 km.