MUMBAI (Metro Rail News): The Government of Maharashtra has approved a financial mechanism that will empower the Mumbai Metropolitan Region Development Authority (MMRDA) to secure loans from foreign financial institutions for six under-construction Metro corridors of the Mumbai Metro Rail Project.
The loan agreements will be executed for the following under-construction Mumbai Metro corridors:
| Line | Route | Length |
| Line 5 | Thane-Bhiwandi-Kalyan | 24.9 km |
| Line 6 | Swami Samarth Nagar-Vikhroli | 14.5 km |
| Line 7A | Dahisar East to Mumbai Airport | 3.17 km |
| Line 9 | Dahisar East to Mira Bhayander | 11.38 km |
| Line 10 | Gaimukh to Shivaji Chowk | 9.2 km |
| Line 12 | Kalyan to Taloja | 20.7 km |
According to the government resolution issued last week, the Maharashtra state government has agreed to provide contingent liability support for loans that the Mumbai Metropolitan Region Development Authority (MMRDA) may obtain from bilateral or multilateral agencies or other financial institutions. This support implies that the state will act as a guarantor, assuming liability only if MMRDA is unable to meet its repayment obligations.
The resolution further states that these loans may be structured either on a back-to-back basis, where the terms of the loan are directly passed through to the borrowing agency or through other appropriate financial arrangements. The borrowing is expected to be carried out at concessional interest rates, potentially reducing the financing burden on MMRDA for the implementation of its metro infrastructure projects.
Under the terms of the resolution, MMRDA will be solely accountable for servicing the loans, including the repayment of principal, interest, and applicable charges. However, the state government has pledged to act as a guaranteeing authority which will fulfil the obligations only in the case of default or under specific exceptional conditions, as defined in the resolution.
This initiative by the state government is expected to play a major role in supporting MMRDA, as it will enable the authority to secure loans more effectively. Access to such funding is likely to facilitate the timely execution and completion of the under-construction metro corridors by ensuring adequate financial resources are available throughout the project lifecycle.
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