The Eknath Shinde-led Maharashtra Cabinet has given an in-principle approval for the acquisition of Mumbai Metro One, a public-private partnership project jointly owned by Reliance Infrastructure Limited (R-Infra), led by Anil Ambani, and the Mumbai Metropolitan Region Development Authority (MMRDA). Ambani’s 74 percent stake in the venture has been valued at 4,000 crore, according to a report by The Hindustan Times.
The joint venture partners have been involved in disputes regarding Mumbai Metro One, the city’s first metro project under the Build-Operate-Transfer (BOT) model in 2007. MMRDA holds a 26 per cent stake in the entity, called Mumbai Metro One Pvt Ltd (MMOPL), while R-Infra holds the majority 74 per cent stake, according to the report.
On Monday, the state cabinet sanctioned a report by Johny Joseph, a former IAS officer, that assessed R-Infra’s stake at 4,000 crore. The Joseph-led panel employed the discounted cash flow model to arrive at the valuation figures, utilising the report of KROLL, a financial advisory firm, according to government sources, as quoted by HT.
The MMRDA-Reliance Infra joint venture has been tangled with disputes over various issues, including the project’s costs, commercial exploitation of metro premises, ticketing structure, and fare hike demands by MMOPL. MMOPL has consistently claimed losses, even though it is the most crowded metro to date, while MMRDA has questioned these claims and dismissed requests for fare hikes.
MMOPL and MMRDA have differing views on the project’s costs, with MMOPL stating 4,026 crore as the construction cost and MMRDA stating 2,356 crore as the actual cost. Additionally, the Brihanmumbai Municipal Corporation (BMC) has asked MMOPL to pay property tax. In 2020, during the COVID-19 pandemic, MMOPL wrote to the state government and MMRDA, requesting them to buy its stake, as per the report.
Former Chief Minister Prithviraj Chavan criticizes the decision. “There was a dispute about the acquisition price. The financial and legal advice to the government was that the price quoted was very high. But this government is favouring the Anil Ambani group,” Chavan was quoted as saying in the report.
