Maharashtra govt sanctions additional capital of Rs 3,500 crore for Samruddhi Corridor

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The Uddhav Thackeray government is also now to name the under-construction expressway after Shiv Sena founder Bal Thackeray

NEARLY THREE months after a special purpose vehicle (SPV) formed especially to enable financing for the Rs 55,000-crore Nagpur-Mumbai Super Communication Expressway or Samruddhi Corridor announced that it had achieved financial closure, the Maharashtra government on Wednesday cleared a Rs 3,500-crore capital infusion for the project.

In mid-September this year, then chief minister Devendra Fadnavis had announced that the Maharashtra State Road Development Corporation, the implementing agency, and its subsidiary formed in 2017 to raise funds, the Nagpur-Mumbai Super Communication Expressway Company Limited, had achieved financial closure after securing loans totalling Rs 28,000 crore from various financial institutions. The MSRDC’s capital investment was Rs 27,477 crore, then stated as being a little over Rs 27,000 crore, to be done on behalf of the state government.

On Wednesday, officials said the additional Rs 3,500 crore, the state’s first direct capital investment in the project, would save interest on loans taken for the project, while government guarantees for other loans could also now be avoided.

Public works department officials said the revised estimated cost of the project is Rs 55,335 crore. While the Nagpur-Mumbai Super Communication Express Way Limited has raised loans, officials claimed there was there was a shortfall of Rs 3,500 crore. “Hence, the government has decided to provide capital of the same amount. This would help to save interest up to Rs 2,500 crore on the loan amount. Also, the government will not have to provide loan guarantees for a Rs 16,500-crore loan. So, the decision will be beneficial for the project and will save the government money,” said an official.

Coming after the SPV announced financial closure, the Cabinet’s decision fundamentally alters the financing model of the project for the cash-strapped Maharashtra government, originally meant to have been based on off-budget borrowings, like various other big-ticket infrastructure projects’ financing pattern in the Fadnavis regime.

The expressway was one of the showcase projects of the previous BJP-led state government and a pet project of Fadnavis. The 700-km corridor is expected to cut travel time from Nagpur to Mumbai from 16 hours to eight hours.

Cabinet Minister Eknath Shinde of Shiv Sena, who also incidentally held the PWD portfolio — MSRDC comes under the department — in the previous government, said: “So far, around 20 per cent work has been completed. The entire project will be completed in the next three years.”

The Uddhav Thackeray government is also now to name the under-construction expressway after Shiv Sena founder Bal Thackeray. Shinde said he made the demand in the Cabinet meeting, and added that the other ministers supported him. “Now, the department will take necessary steps regarding renaming the project,” said Shinde.

In another decision, the government on Wednesday decided to waive stamp duty and registration charges for various contracts being signed by agencies building and funding the project.