NEWS

MSRDC plans to sell or lease out Mumbai-Pune Expressway land

October 08, 2018

The Maharashtra State Road Development Corporation (MSRDC) has plans to sell or lease out 1,000 acres along the Mumbai-Pune Expressway. The land is valued around Rs 12,000 crore.

This is planned to be done in nine or ten years to partly repay loans of around Rs 28,000 crore to nine banks which are funding the upcoming 701-km Mumbai-Nagpur super-communication highway, dubbed the state's prosperity corridor.

There were reports that the land would be mortgaged, but officials confirmed that the land would be sold or leased out. A mortgage deal would be for a shorter tenure, at the end of which land would be returned to the owner in its original state. In a lease, such conditions may not hold as land is usually handed over for long periods.

Just like its E-way lands, MSRDC plans to monetize 29 acres near the Sea Link and about 1.5 acres on Napean Sea Road. This way, it expects to earn Rs 6,000-8,000 crore, thus taking its combined "land bank monetization" earnings to Rs 18,000-20,000 crore. Besides borrowings, MSRDC will enter into equity partnership with the state to raise another Rs 27,000 crore for the grand Rs 55,000 crore Mumbai-Nagpur highway project. According to a senior MSRDC engineer, if the land market improves, there are chances that MSRDC may gain up to Rs 23,000 crore from all three land parcels.

MSRDC is borrowing Rs 28,000 crore from banks. The state has already approved a 12% rate of return, that is 2% over and above the loan interest rate, which is likely to be around 10%, for the project cash flow. The move to monetize its land bank will help MSRDC reduce debts substantially during the loan period of 28 years. This will be besides its earnings through toll and by sale of commercial rights.

According to estimates, the initial annual toll collection from around 35,000 vehicles per day is expected to be around Rs 1,100 crore. The initial one-way toll fixed for passenger car units will be Rs 1,200 when the project gets commissioned for traffic by 2021.

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Source:magicbricks.com