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  1. Mumbai Trans Harbour Link Project cost jumps 295 pct, but toll rates to remain same!

Mumbai Trans Harbour Link Project cost jumps 295 pct, but toll rates to remain same!

Although the project cost for the Mumbai Trans Harbour Link (MTHL) project has jumped a whopping 295% since the first estimate in 2005, the toll rates proposed for the 22-km long bridge are expected to remain the same as proposed in 2012

By: | Mumbai | Published: November 21, 2017 4:55 AM
Mumbai Trans Harbour Link, MTHL, MMRDA, Mumbai Metropolitan Region Development Authority, news, Indian news, business news (Source: PTI)

Although the project cost for the Mumbai Trans Harbour Link (MTHL) project has jumped a whopping 295% since the first estimate in 2005, the toll rates proposed for the 22-km long bridge are expected to remain the same as proposed in 2012: `175 for passenger cars, `265 for light commercial vehicles, `525 for buses and trucks, and `790 for heavy axle vehicles, all for one way journeys. MTHL, first conceived as a six-lane project in 2004, saw the cost escalate from about `4,500 crore in 2005 to `9,360 crore in 2013 to `11,000 in 2014. The cost now is pegged at `17,800 crore. The escalation is largely due to changes proposed in the design by the financing agency — the Japanese International Cooperation Agency (JICA) — to include two rescue lanes on either side, to be used only in times for emergency for evacuation, making it an eight-lane bridge. Sanjay Khandare, additional metropolitan commissioner, Mumbai Metropolitan Region Development Authority (MMRDA), confirmed to FE that the bridge would be eight lane, with two emergency lanes on both sides. The construction technique, for the girders, too has changed from concrete to iron and steel, translating to an additional outlay. When the project was first conceived, it was to be built under the build-operate-transfer (BOT) model. In 2013, MMRDA had estimated more than 62,000 passenger car units would ply on the bridge, gradually increasing by 5% every year to reach 2,00,000 vehicles a day in the 30th year. This was built on the premise that the proposed Navi Mumbai International Airport would be operational, a development shrouded under much uncertainty till earlier this year. Low visibility on the airport coming up saw interest of developers in the project wane. To address this concern, MMRDA changed the model to an engineering, procurement and construction (EPC) one.

Despite the change in model and cost escalation, MMRDA isn’t unduly perturbed. An official told FE the cost escalation isn’t a big problem as the loan is now offered to MMRDA at an interest rate of just about 1%, in line with the general interest rate that JICA has indicated for all infrastructure projects in India. MMRDA, therefore, does not see the need to charge higher toll rates compared to the proposed one under the BOT model in 2012. JICA is funding 85% of the total project cost with MMRDA putting in the rest. Alok Deora of IIFL Research argues that the rise in costs will have to be recovered from commuters. He told FE: “The toll period, which has been proposed at 30 years — and this is one of the longest toll recovery periods we have seen till now for any infrastructure project — could be increased further to recover part of the additional construction costs.” With toll charges being a political issue in Maharashtra, Deora too believes that recovery would more likely be through extension of the recovery period than higher toll rates.

On November 18, L&T, the winning bidder for two of the three stretches for constructing the MTHL, received the letter of intent (LOI) by MMRDA. While it won the first part of the package in partnership with Japan’s IHI Corporation, it won the third package on its own. Both packages are at either end of the bridge and extend to some distance over the sea. The second package — entirely over the sea — was awarded to Tata Projects who bid jointly with Daewoo of Korea. MTHL is intended to serve as an economic gateway to Navi Mumbai, connecting Mumbai to the Nhava Sheva Port, the Pune Expressway, the Goa Highway and the proposed Navi Mumbai International Airport. Moreover, it will not only provide connectivity to commuters going towards Thane-Nashik and Panvel-Pune, but further to southern India as well. The sea bridge is also expected to boost the economical growth of the whole of Raigad district and its surrounding areas.

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