2024-07-06 08:52:57
New Delhi: The Eknath Shinde government of Maharashtra has shelved the plan to buy Mumbai Metro’s oldest line Metro 1. But the state cabinet has directed the executive committee of MMRDA to evaluate the debt of Rs 1,700 crore of Mumbai Metro One Private Limited (MMOPL) through a one-time settlement. The 11.4 km long Metro-1 corridor is between Versova-Andheri-Ghatkopar. This is the only corridor of Mumbai Metro which was built through public-private partnership. A special purpose vehicle MMOPL was formed for this. MMRDA has a 26% stake in it and Anil Ambani’s company Reliance Infrastructure has a 74% stake. 4.6 lakh passengers travel daily in this corridor. Reliance Infra’s share jumped by about 10 percent on this news. Despite the decline in the stock market, the company’s share reached Rs 206.65 during trading on BSE. MMOPL owes some six banks. These include State Bank of India, IDBI Bank, Canara Bank, Indian Bank, Bank of Maharashtra and IIFCL (UK). In March 2024, the company had an agreement with its lenders under which it agreed to pay Rs 1,700 crore to settle its entire debt. Under this arrangement, MMRDA and MMOPL made an initial payment of Rs 171 crore to the lenders. Sources said that now in the cabinet meeting on June 26, it was decided that the executive committee of MMRDA should be asked to discuss the issue of one-time settlement.
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The cabinet reversed the decision
It is noteworthy that on March 11, the state cabinet approved the purchase of Reliance Infra’s 74% stake in Metro-1 by MMRDA for Rs 4,000 crore. But MMRDA said it did not have the money for it. It requested the state government to provide funds but the government rejected it. The state cabinet recently reversed its purchase decision. Now the MMRDA commissioner is planning to hold a meeting with all six lenders of MMOPL to discuss the issue. From April 2023 to June 2024, MMOPL has paid interest of more than Rs 225 crore.
MMOPL was facing bankruptcy proceedings in the National Company Law Tribunal. IDBI Bank initiated bankruptcy proceedings in October 2023 over dues of Rs 133.37 crore, while SBI initiated proceedings in August 2023 due to defaults of Rs 416 crore. MMRDA had paid Rs 170 crore, i.e. 10 per cent of the one-time settlement amount. After that, the NCLT settled the bankruptcy cases. When contacted, a MMOPL spokesperson declined to comment. MMRDA officials were also not available for comment.
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What is the dispute about
Officials clarified that Metro Line 1, built at a cost of Rs 2,356 crore, is not in loss, but Anil Ambani Group, which is facing financial crisis, wants to exit this project. The concession agreement was signed between MMRDA and MMOPL in 2007. This corridor became operational in 2014. There is also a legal battle going on between MMOPL and MMRDA regarding its cost. MMOPL claims that Rs 4,026 crore was spent in building this corridor while MMRDA says that its original cost was Rs 2,356 crore.