MMRDA to ensure consortium does not desert MTHL midway
The high-risk project has had a few false starts, with two failed rounds of bidding. The project has finally been set in motion with MMRDA having invited technical and financial bids last month.
The locking-in of equity was one of the main conditions of the Union Finance Ministry before granting viability gap funding (VGF), which is the government’s contribution to a public-private-partnership (PPP) project, for the Rs 9,630 crore project. The VGF is a maximum of 40 per cent of the project cost, while the concessionaire brings in the rest through a combination of equity and debt.
As per the conditions of the central government, the concessionaire will have to first use up the equity component before turning to debt. Likewise, the central government will release VGF bit-by-bit once the concessionaire has exhausted the equity component and is starting to put in debt, said Rahul Asthana, metropolitan commissioner at MMRDA.
“Typically, about 20 per cent of the project cost is in the form of equity, which means the concessionaire will have to first put roughly Rs 2,000 crore. This will ensure that the concessionaire’s equity is in the project so
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