MMRDA hopeful of more central funds for Mumbai metro

Considering the high cost of the underground sections of the metro lines being planned for the city, the Mumbai Metropolitan Region Development Authority (MMRDA) is making an all-out effort to get sanction for higher viability gap funding (VGF) from the Centre.

If the efforts are successful, Mumbai’s metro master plan may get substantial financial boost for speedy implementation. MMRDA commissioner Ratnakar Gaikwad is optimistic about getting the sanction.

“Out of the metro’s total 146 km, 32.5 km is underground. Though in patches, the underground sections are going to cost a massive Rs600 crore per km. This obviously means high project costs and even higher VGF,” he said. “But the silver lining is that the Centre is positive in its response to our demands. It has assured us that it will look into providing higher VGF to Mumbai’s metro plans.”

As per the rules, the Centre gives financial aid only to projects which have a viability gap of less than 40%. In case of both metro-I and II, the viability gap is approximately 30% (Rs650 crore in case of metro-I, where the project cost is Rs2,356 crore, and Rs1,532 crore in case of metro-II, where the project cost is Rs7,660 crore).

“But in the case of these underground patches, our viability gap is as high as 50% of the total project cost. We have made a strong case for the Centre to fund these gaps giving some relaxation to the 40% rule,” Gaikwad said.

“The Centre’s urban development department has shown positive signs for the proposal and the department of economic affairs, which is the ultimate authority on sanctioning the VGF, may relax the norms eventually.”