In a financial boost to Maharashtra Metro Rail Corporation Limited (MMRCL), Maharashtra Government has ordered release of Rs 150.59 crore as part of subsidiary debt for Nagpur Metro project. Alongside, State has also issued a GR authorising release of Rs 33.41 crore part of its equity capital in the special purpose vehicle (SPV), the MMRCL that was constituted with 50:50 partnership for rolling out metro rail services. The funds were due since long for the current financial year however its release got delayed due to outbreak of COVID-19 pandemic that hit hard the tax collection of State Government. With financial year nearing end, the authorisation for release would give much needed support to Maha Metro to meet its financial obligation.

 

 

 

The total cost of Nagpur Metro’s first phase was pegged at Rs 8,680 crore and gradually Centre and State released funds from time to time. The GR for the subsidairy debt mentioned that State had approved budgetary outlay of Rs 200.79 crore for the year 2020-21 to provide the finance to MMRCL that is executing metro rail projects in Nagpur and Pune cities. Out of the approved sum, right now Rs 150.59 crore will be provided to Nagpur Metro project, meaning a cut of nearly Rs 50 crore and this could be due to tight financial position in aftermath of dip in tax revenue. With release of Rs 150 crore, the total subsidairy debt provided to MMRCL would reach Rs 393.21 crore.

 

The release of finance is going to provide a breather to MMRCL and enable it to push the ongoing project further and also meet financial liabilities as to payments. State has approved subsidiary debt of Rs 150,59,25,000 for Nagpur Metro project when erstwhile Nagpur Metro Rail Corporation Limited was converted to MMRCL in year 2004. The debt is tax free and same is to be repaid by the corporation after servicing the loans taken from international financial institutions.

 

However, the said repayment is to be done in single stroke post other financial obligation are met with by MMRCL, states the GR. Meanwhile, MMRCL would also get another tranche of Rs 33.4125 crore towards equity stake in the joint venture company. Total contribution through equity in the company is estimated at Rs 1,114 crore of which maximum amount is released so far. With latest authorisiation, total equity released would reach Rs 937.86 crore. The GR also underscored an important point that NMC and NIT have to contribute in the equity capital of MMRCL as per the agreement signed while forming the company. Nagpur Municipal Corporation (NMC) and Nagpur Improvement Trust (NIT) both are struggling financially and have been unable to provide cash in form of 5 per cent equity stake that both agencies are provided.