MUMBAI: The Eknath Shinde govt may have shelved its plans to acquire Metro 1, but the state cabinet has directed MMRDA‘s executive committee to consider clearing, by way of a one-time settlement, the Rs 1,700 crore debt owed by Mumbai Metro One Pvt Ltd (MMOPL) to its lenders.
Metro 1, the oldest in Mumbai which currently serves 4.6 lakh passengers daily, is the only corridor executed through a public-private partnership. It is run by a special purpose vehicle, the Reliance Infrastructure-promoted MMOPL. MMRDA has a 26% stake in the SPV, while Anil Ambani’s R-Infra holds 74%.
There are six lenders in all: State Bank of India, IDBI Bank, Canara Bank, Indian Bank, Bank of Maharashtra, and IIFCL (UK).
In March 2024, MMOPL signed a debt settlement agreement with the lenders, committing to pay Rs 1,700 crore as one-time settlement of its entire debt. As part of the agreement, MMRDA and MMOPL made upfront payment of Rs 171 crore to the lenders.
On March 11, the state cabinet had cleared purchase of R-Infra’s 74% stake in Metro-1 for Rs 4,000 crore by MMRDA. The buyout would have allowed MMOPL to exit the project. However, MMRDA said it could not finance the acquisition and requested state funding, which was denied, leading the state cabinet to reverse its purchase decision recently.
Now, at a June 26 cabinet meeting, sources said, it was decided to ask MMRDA’s executive committee “to discuss the issue of the one-time settlement.” MMRDA was directed to take immediate action for implementation of the cabinet move, sources added.
The MMRDA commissioner will soon convene a meeting with all six lenders of MMOPL to deliberate on the matter. Between April 2023 and June 2024, MMOPL has regularly paid interest to the lenders amounting to over Rs 225 crore.
MMOPL was facing insolvency proceedings in the National Company Law Tribunal (NCLT). IDBI Bank initiated insolvency proceedings in Oct 2023 over dues of Rs 133.37 crore, while SBI followed in Aug 2023 due to defaults amounting to Rs 416 crore. NCLT disposed of the insolvency cases after MMRDA paid Rs 170 crore, which is 10% of the one-time settlement amount.
When contacted, an MMOPL spokesperson declined to comment. MMRDA officials were also unavailable for comment.
Officials clarified that Metro Line 1, constructed at a cost of Rs 2,356 crore, was not making operational losses, but the financially troubled Anil Ambani group wanted to exit the project.
The concession agreement between MMRDA and MMOPL was signed in 2007, and the corridor became operational in 2014.
MMOPL was also engaged in arbitration against MMRDA over cost escalation during construction of Metro Line 1. While MMOPL claims it cost Rs 4,026 crore to build Metro Line 1, MMRDA maintains the cost is Rs 2,356 crore as per the original contract.
