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Recession in Japan will not impact JICA’s loan to Mumbai Trans Harbor Link project

Even with Japan falling into recession, the BJP government in Maharashtra and the state-run Mumbai Metropolitan Region Development Authority (MMRDA) today said they do not see any problem in getting a loan from Japanese International Co-operation Agency (JICA) for the Rs 11,000 crore Mumbai Trans Harbour Link (MTHL) project. 
Both the government and MMRDA are pursuing the matter with JICA and hope to get the loan for the ambitious 22-km long Trans Harbour Link.

A MMRDA official, who did not want to be named, told Business Standard, “Notwithstanding Japan falling into recession, we are quite confident that JICA will provide the loan for the MTHL project. The JICA team, which held talks with MMRDA officials in July, had indicated that it may give up to 80% loan for the project, which is approximately Rs 8,800 crore. The state government and MMRDA are pursuing the matter with JICA and are optimistic it will be approved in the next two months.”

The official said that CM Devendra Fadnavis reviewed the project about 10 days back and said he will seek Centre’s intervention for early loan approval by JICA.

BS had reported about JICA’s plans to provide up to 80% loan for MTHL project after its team visited in July this year.
 

MMRDA official said MTHL project will facilitate de-congestion in Mumbai by improving connectivity between Island city and main land (Navi Mumbai). 

“Already the MMRDA has taken a decision to undertake the construction on a cash contract wherein a contractor will be appointed through competitive bidding to complete the project. MMRDA will own the project,” he noted. 

The official though admitted that the decision to develop the project on a cash contract was taken after bidders stayed away during the bidding process conducted last year.

He said the UPA-II government had already approved 20% of the project cost as viability gap funding (VGF). However, he added that the VGF arrangement will not apply to the cash contract model.

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