Panel values R-Infra’s 74% stake in Metro-1 corridor at 4,000cr | Mumbai News – Times of India | IIT EXPERT



MUMBAI: An internal study group headed by former chief secretary Johny Joseph has valued the 74% stake held by Reliance Infrastructure Ltd (R-Infra) in the Metro-1 corridor at Rs 4,000 crore, TOI has learnt.
The study group has submitted its report on the valuation to the Mumbai Metropolitan Region Development Authority (MMRDA). A decision on whether the latter will purchase R-Infra’s stake will have to be placed before the Maharashtra cabinet.The acquisition has been dragging on for years, with the government and the company unable to agree on the valuation.
The 11.4-km Metro-1 line runs between Versova-Andheri-Ghatkopar and provides connectivity between the Eastern and Western suburbs to the Western and Central railway. It is the only corridor executed through a public private partnership and is run by a special purpose vehicle (SPV) – the Mumbai Metro One Private Limited (MMOPL). The MMRDA has a 26% stake in the SPV, while Anil Ambani’s R-Infra holds 74%.
Sources say the study group used the discounted cash flow model to arrive at the valuation. It also used report of financial advisory firm, KROLL.
The concession agreement between MMRDA and MMOPL was signed in 2007. In 2020, R-Infra wrote to the state government saying it wanted to sell its stake in MMOPL owing to heavy losses suffered during the pandemic. However, negotiations have made little progress since then.
MMRDA is the nodal authority implementing the 337-km Metro network in the Mumbai Metropolitan Region. The Metro-1 project is the oldest line in the city, but has faced losses since it became operational in 2014. MMOPL planned to raise fares but faced hindrances.
In 2019, the second fare fixation committee rejected MMOPL’s proposal to raise fares and asked it to consider non-fare revenue generation. MMOPL is also in the middle of arbitration against over-cost escalation during construction of Metro-1. While MMOPL claims it cost Rs 4,026 crore to build Metro-1, MMRDA claims the cost is Rs 2,356 crore as per the original contract. The ridership on Metro-1 has remained high, barring the period when it was shut owing to Covid. It carries 4.6 lakh commuters on weekdays, operating 408 trips daily.





Source link

Leave a Comment

Your email address will not be published. Required fields are marked *