Rs 6,000-crore Bandra-Versova sea link hinges on central funds

It might be a state project, but the central government’s intervention is now key for the bidding process of the R6,000-crore Bandra-Versova Sea Link project in Mumbai to move forward.

Senior officials in Maharashtra State Road Development Corporation (MSRDC), the implementing authority, say the two companies that submitted bids at the pre-qualification stage have termed the proposed concession period of 35 years as too long for the project to be financially viable. The bidders have asked MSRDC to get viability gap funding (VGF) for the project to bridge some of the financial gap and bring down the concession period. As a result, MSRDC is now awaiting a nod for 20% VGF from the central government for this 14.8-km showpiece project, before it can float the request for proposal (RFP).

The Bandra-Versova Sea Link project received only two bids at the pre-qualification stage, one from IRB Infrastructure Developers and another from Larsen and Toubro.

Anil Diggikar, vice-chairman and MD of MSRDC, told FE: “The bidders are asking for VGF component to be included in the project, so we have asked the Centre for it and are awaiting approval.”

Diggikar said financial bids can be called only after VGF is penned into the project, without which bidders have expressed concern over achieving financial closure for it. Spokespersons for both L&T and IRB declined comment on the issue.

The Bandra-Versova sea link is slated to be built on the PPP model, and will be a tolled project.

It is expected that over 45,000 vehicles will be using the link by 2020, which would include buses, cars, light commercial vehicles and trucks. The vehicle count is expected to cross 1.2 lakh by 2045.

MSRDC is also in talks with Japanese International Cooperation Agency (JICA) for funding of the project. The sea link is proposed to be an extension of the existing Worli-Bandra sea link, connecting it with suburbs further north of the city.

It was expected that the implementing authority will float RFP for the project last month itself. However, with bidders sticking to their stance on VGF, the project is hanging fire till the time such funding is agreed upon between the state and Centre.

MSRDC officials refrained from giving any definite timeline for the RFP dates, but believe it can happen soon. The officials also deny any upward revision in the cost of the project, or it possibly clashing with the proposed R8,000-crore Nariman Point-Kandivali coastal road project, which is yet to get clearance from the central government.