Unsure of government funding, MSRDC stalls tendering.

As uncertainty persists over obtaining partial government funding for the Bandra-Versova sea link to reduce the toll to be levied, the cash-strapped Maharashtra State Road Development Corporation (MSRDC) has stalled the tendering process for the Rs. 5,975-crore project, for now.

The corporation had initiated the bidding process for the Bandra-Versova sea link, the northward arm of the landmark Bandra-Worli sea link, in March this year on a 'design, build, finance, operate and transfer' model by calling for pre-qualification bids. In July, it received bids from two firms. However, the MSRDC is yet to draft the Request for Proposal (RFP) document that is to be handed over to the two eligible bidders for financial bidding.

SM Ramchandani, joint managing director at the MSRDC, said, 'We had applied for viability gap funding to the Union government under its scheme where it can grant funds for up to 20 percent of the project cost. We are yet to get a response, that is why we haven't given the RFP documents to the shortlisted bidders yet. If we get the viability gap funding we will factor that in for the RFP documents, if not, then we will float RFPs without any viability gap funding component.'

The MSRDC has been unable to fund its own projects due to bleak finances. As per the latest available records, the corporation had an indebtedness of Rs. 3,188.5 crore as of March 31, 2012. The agency does not get an annual budget from the state, but raises funds for projects through commercial borrowings.

The MSRDC had sent the proposal for viability gap funding to the state a little after starting the tendering process for the 9.3-km sea link. However, Ramchandani said there was a delay in forwarding the same to the Centre's Department of Economic Affairs under the Finance Ministry of Finance.

The corporation had initially proposed the Bandra-Versova sea link to be built completely on private funding with a concession period of 35 years. The concession period refers to the time duration for which the private company will operate the sea link and collect toll.

However, after some members expressed reservations in a meeting of the state cabinet sub-committee of infrastructure about the concession period being too long, the MSRDC decided to seek funding from the Union government to reduce the concession period to 28-30 years.


THE INDIAN EXPRESS