Mumbai Metro News: Who Will Pay The Bill? BMC And MMRDA At Odds

The Mumbai Metropolitan Region Development Authority (MMRDA) and the Brihanmumbai Municipal Corporation (BMC) are currently in a dispute regarding the cost-sharing for metro rail and other multimodal projects. The disagreement has significant implications for the future of Mumbai's transportation infrastructure.

Over the past few years, the MMRDA has invested Rs 19,141.63 crore in developing metro corridors and ensuring last-mile connectivity to metro stations. According to an agreement, the BMC is expected to cover 25 per cent of this cost, amounting to Rs 4,959 crore. However, the BMC is prepared to pay only Rs 2,500 crore, citing heavy expenses incurred from other major projects such as the coastal road.

Photo Credit: PTI

In an attempt to resolve this financial impasse, the MMRDA has decided to commercialise its land bank in the city. It has already invited tenders for leasing seven plots in the Bandra Kurla Complex (BKC) and hopes to raise at least Rs 5,947 crore through this initiative.

The MMRDA is working on seven metro rail corridors-lines 2A, 2B, 3, 4, 6, 7, and 7A-covering a total distance of 142 kilometres. With Rs 19,144 crore already spent on these projects, the MMRDA is urging the BMC to fulfil its financial commitment.

"In 2016, the state government mandated that BMC must contribute 25 per cent of the cost for metro projects. This is what we are asking for," stated an MMRDA official. The Unified Mumbai Metropolitan Transport Authority (UMMTA) had also directed that the BMC should contribute 50 per cent of the cost for multimodal integration outside metro corridors.

The MMRDA contends that the BMC's contribution is essential as metro corridors significantly enhance the city's infrastructure, boosting property values and increasing property tax revenue. "The metro projects improve the livability index of citizens and enhance the quality of commute," added the MMRDA official.

In a letter earlier this year, the MMRDA urged the BMC to pay its share. The letter highlighted that the MMRDA has been implementing the Metro Master Plan, with Metro-1 operational since June 2014 and Metro-2A and 7 operational since January 2023, serving 2.5 lakh passengers. Construction is underway for Metro 2B, 3, 4, 4A, 6, and 7A, all within the BMC's jurisdiction. The MMRDA has also undertaken multimodal integration to ensure seamless connectivity for commuters.

Urban planners agree that infrastructure development directly impacts real estate and property prices, which have appreciated due to the operational and under-construction metro lines.

The BMC has made partial payments to the MMRDA, providing Rs 950 crore in March and Rs 1000 crore in April from the one per cent development charge collected from real estate projects. "This one per cent charge, meant for vital infrastructure projects, amounts to around Rs 5,000 crore. We requested the government's permission to pay 50 per cent of this or Rs 2,500 crore to the MMRDA because we also have significant projects like the Coastal Road and the Goregaon Mulund Link Road," explained a senior BMC official. Following government approval, the BMC plans to pay an additional Rs 500 crore, bringing its total contribution to approximately Rs 2,500 crore.

Photo Credit: PTI

To address the funding shortfall, the MMRDA is leveraging its land bank. It has invited tenders for leasing three residential and four commercial plots in BKC for 80 years, expecting to earn Rs 3,657 crore and Rs 2,290 crore, respectively. Given BKC's status as a prime commercial and residential area, leasing these plots is anticipated to generate substantial funds for further infrastructure development.

In July, the MMRDA received approval to raise Rs 50,000 crore via bonds to finance metro corridors and other infrastructure projects in Mumbai and surrounding areas. This financial strategy is intended to provide a buffer in case of non-receipt of payments from the BMC and other sources over the next five years.