"I expect to raise the money at about 13.5 per cent," he said. MSRDC had earlier announced that it would be raising Rs 800 crore in one go. However, the state government has asked the corporation to go in for two tranches.

According to sources, the state government would find it easier to provide a guarantee cover for the smaller amount, as the new bond issue for the Krishna Valley Water Project has already stretched its exposure limits.

There have been doubts expressed in the market over the state government's ability to give guarantees the way they have in the past what with revenues falling. Also, new projects such as the Rs 400 crore Worli-Bandra link will be constructed without astate government guarantee, leading to speculation that MSRDC's debt will also have to be raised without one.

Scotching such speculation, Sinha said, "The debt is being raised to be able to complete three ongoing projects, the Mumbai-Pune expressway, flyovers in Mumbai and the rail-overbridges. Since the first round of the debt has been raised with a government guarantee, the entire project cost will have one, regardless of the batches in which we raise it."

The mandate to raise the funds is yet to be awarded to any merchant banker, but Sinha says that they will receive presentations soon. A year and a half ago, MSRDC had come out with an issue of Rs 500 crore, but thanks to a government guarantee and aggressive marketing of the projects, particularly the Mumbai-Pune expressway, it raked in Rs 1,180 crore. MSRDC retained the entire over-subscription and ploughed it into the flyovers project. The debt issue was handled by DSP Merill Lynch. Among the big investors was UTI with over Rs 250 crore, severalfinancial institutions and nationalised banks.

Several public sector provident funds are also sizable investors in MSRDC. Sources in the financial sector expect a good response to the debt issue on two counts. Firstly, a government guarantee has made it a risk-free investment. Secondly, all projects, barring the Mumbai-Pune expressway which is slightly behind schedule, have been completely well within their deadlines and have conformed to fairly high quality standards. The MSRDC is expected to reap the benefits of this good public perception, when its debt issue hits the market.

Contract for Worli-Bandra awarded

MSRDC has awarded three of the four construction contracts for the Rs 400 crore Worli-Bandra link. The contractors include the UP Bridge Corporation, Vichare and Co and Prakash Constructions. The combined cost of the three contracts is Rs 80 crore.

This was confirmed by the managing director of MSRDC, RC Sinha. The Worli-Bandra link, to be completed in 30 months, will be commissionedin 2002. It will be constucted in four portions. The largest, estimated to be a contract worth almost Rs 250 crore, will be awarded soon. The total cost of Rs 400 crore includes interest during construction and consultancy costs.

The eight lane Worli-Bandra link will have two lanes dedicated to public transport. About 5.6 km long, it includes a four km bridge including a half kilometre cable stayed section and a viaduct at the Worli end. The 1.6 km stretch in Bandra will include the toll plazas.

The cable stayed section of the bridge will include a 500 metre viewing tower, expected to be a tourist attraction. A uniquely designed elevator capsule will carry tourists to the glass encased viewing tower. Also planned is a promenade at the Bandra end. The MSRDC plans to make this an intelligent bridge, with state-of-the-art facilities for surveilliance information to monitor traffic.