Trans-harbour link: Mah govt says ready to cover revenue gap

August 29, 2011

Mumbai, Aug 28 (PTI) In a bid to attract more bidders for the ambitious Rs 10,000 crore Mumbai Trans-Harbour Link project connecting Sevri in the northeastern part of the city with Nhava Sheva (JNPT Port area), the Maharashtra government has proposed to cover the revenue risk of the BOT operator.
“We cannot take construction risk, but we can definitely cover the revenue risk of the BOT operator. We plan to offer a long, soft loan to the BOT operator and also compensate the second and third lowest bidders (L2 and L3 bidders) for the cost of bidding,” Mumbai Metropolitan Regional Development Authority (MMRDA) Commissioner Rahul Asthana has said.
The government started the bidding process in 2004, but it has not been able to make any progress so far.
“This move will encourage more developers, including from overseas, to bid for the ambitious project. We believe that by the third quarter of 2012, we will be able to award the contract,” Asthana said.
MMRDA, the nodal government agency for infrastructure development in the city, is also ready to compensate the BOT operator in case of lower toll collection vis-a-vis projections, he said.
“However, in the case of higher toll collection, the BOT operator needs to share the benefits with MMRDA,” he added.
Maharashtra State Road Development Corporation Limited (MSRDC) — the state road development body that was earlier handling the project — made several attempts to invite bids in 2004 on a BOT basis and in 2008 on a design-build-contract basis.
In June, 2008, separate bids by the Ambani brothers were found unrealistic. Reliance Industries had bid for a 75-year concession period on the project, while the ADA Group quoted only a 10-year concession period. .

Source: http://news.in.msn.com