Mumbai’s long wait to replicate Manhattan, gets longer
Sep 07, 2013
Source : The Times of India

 

MUMBAI: Perhaps no other ambitious urban infrastructure project that has been touted as a game changer, has waited for more than 30 years, yet has had no takers, with a future that is delayed, if not denied. The Mumbai Trans Harbour Link (MTHL) project has been under consideration for the last 30 years to develop the island city the way Manhattan in the US has been developed, reduce traffic congestion and grow the area surrounding Navi Mumbai.

The project was conceptualised to provide connectivity between Sewri in the island city and Nhava in the mainland (Navi Mumbai) for speedy travel.

A critical role was played by the Mumbai Metropolitan Region Development Authority (MMRDA) while planning this project. However, as MMRDA was then primarily a planning body, the project was handed over to the Maharashtra State Road Development Corporation (MSRDC) in 1997. The MSRDC studied the project and invited bids on a Build-Operate-Transfer (BOT) basis. However, there was a major difference between the concession period proposed by MSRDC and that which was demanded by the contractors. The state government therefore, cancelled the bid process. Thereafter, the MSRDC decided to implement the project on a cash contract basis and invited bids in October 2008 but did not receive a single bid.

The government of Maharashtra, on February 4, 2009, decided to hand over the ownership of the project to MMRDA and directed that the project be implemented by MMRDA. It was also decided that the costs for the project will be made available by the MMRDA. The project was originally planned as a road transportation project. However, the government of Maharashtra, through a government resolution dated June 8, 2011, accorded the status of ‘regional development project’ to MTHL. It was announced that a viability gap funding to the tune of 20 per cent of the project cost, would be made available by the government of India.

Just when it seemed like Mumbai’s wait for its showpiece infrastructure project was over, none of the five shortlisted firms put in a tender for the ambitious MTHL project. “We did not receive any bid from the private sector for the MTHL project,” MMRDA additional metropolitan commissioner Ashwini Bhide told the media. On July 31, 2013, one of the five shortlisted companies, IRB Infrastructure, stated that it would not bid for the MTHL. IRB Infra had tied up with Hyundai Engineering for the sea bridge. The other four shortlisted consortia were Cintra-Soma-Srei; Gammon Infrastructure Projects-OHL Concessions-GS Engineering; GMR Infrastructure-L&T-Samsung C&T Corporation; and Tata Realty and Infrastructure-Autostrade Indian Infrastructure Development-Vinci Concessions Development. “We had provided all the necessary assistance to mitigate the risks for the private sector. Right from clearances to assuring financial assistance, we had addressed most of their problems. Yet, we did not get any response,” Bhide says.

After repeated failures, MMRDA extended the deadline for the shortlisted consortia to submit bids by August 5, 2013, from the original date of May 24, 2013, after the bidders sought additional time. Bhide informs that the Maharashtra government had also approached the centre for making changes in the model document of the project, on certain terms and conditions, to address some of the issues faced by the private sector. To address some of its financial risks, the union finance ministry, in January 2013, sanctioned viability gap funding to the tune of Rs 1,920 crores for the project.

A senior MMRDA official directly involved with the project, states that the companies didn’t bid because most of them have strained balance sheets and do not want to leverage it any more. Chief minister Prithviraj Chavan indicated some time ago that the state may build the project on its own if the private sector does not participate.

As a matter of fact, IRB went on record to say it won’t bid for this project as a bad experience in another project in the state, has made it wary. Infrastructure developers are fighting high interest burden on one hand and low returns on the other, due to the economic slowdown. Most of these companies have indicated that they will be highly selective about participating in projects via the public-private-partnership model, given their stretched financial condition.

In what appears to be a case of the ‘chicken and egg syndrome’, it is debatable whether the companies opted out of the project due to over-leveraged balance sheets or the fear of policies changing mid-way, since elections are approaching and the project needs policy support over a long period of time. The real estate segment, expecting a turnaround in fortunes post this project, is obviously disappointed.

A strong advocate of the MTHL project changing the urban landscape of Mumbai, Pranay Vakil, chairman, Praron Consulting, is one of the people who are disappointed. He highlights that the urban infrastructure has not kept pace with the massive influx of people. Roads are in a constant state of disrepair, perpetual traffic congestion and an overstressed rail network, are characteristics of the transportation system today. One only has to look at leading western cities like Manhattan and London, which have multiple efficient lines for commuting to the CBDs.

“Manhattan faces much of the same land constraints as Mumbai, as well as the fact that it is a peninsular city. However, efficient and far-sighted planning has ensured its evolution over and under the ground, with skyscrapers and underground metros, which maximise land use. Its local railways connect locations up to 132 kms away and ferries provide connectivity to dense residential hubs like New Jersey. Using this example as a model, existing FSI norms for frontline cities such as Mumbai, Delhi and Bangalore, must be relaxed to maximise land use,” says Vakil.

CREDAI chairman Lalit Kumar Jain also expresses disappointment over the news that there has been no bidder for the project. According to him, the project would have improved connectivity between Mumbai and its neighbouring satellite townships. It also had the potential to be a game changer in the urban landscape of the city, by providing a much-improved infrastructure. “It would have decongested the city, with people looking for affordable homes on the other end of the project. With land becoming increasingly scarce in Mumbai, it is essential for urban planners to look for land parcels in Navi Mumbai and other areas to develop mass and affordable housing, along with improved connectivity with Mumbai. We are, however, happy to note that the MMRDA is now looking at executing the project on its own. Let us hope the dream project will be ready sooner than later,” states Jain.

Subhankar Mitra, head-strategic consulting (west), Jones Lang LaSalle India, has a different take when he says that technically, another year’s delay would not make much of a difference. However, he accepts that the announcement of the Mumbai Trans Harbour Link has definitely played a role in the marketing of properties in areas like Ulwe and Panvel and raised the overall desirability quotient for end-users, investors and developers.

“The anticipation was tempered with an understanding of how things work, when it comes to infrastructure in Mumbai. If we look at the present status of similar infrastructure projects such as the Worli-Haji Ali sea link, the Charkop-Bandra-Mankhurd and Colaba-Bandra corridor metro lines, most of them are stuck due to various bottlenecks and are running abysmally behind schedule,” elaborates Mitra.

The Mumbai Trans Harbour Link seems to be weathering one rough patch after another. Earlier this year, it was stuck because of its run-in with the Jawaharlal Nehru Port Trust (JNPT) future expansion plans. The MMRDA and JNPT were at loggerheads regarding the latter’s request to the MMRDA, to raise the height and shift the alignment of the link to prevent it from interfering with JNPT’s fifth terminal plans. Finally, the shipping ministry had to step in to announce that JNPT had given its nod to the MTHL project. However, this nod came at the expense of JNPT’s own expansion plans of its fifth terminal.

Urban planning experts in Mumbai maintain that there are mid-to-long term real estate implications of the project getting into a logjam. Had the project taken off, it would have proven to be a huge psychological boost for the investors in residential projects in these new localities, which would have catalysed into commercial activity. Now that the project has been deferred, it has not just delayed the investment plans of the real estate companies but also postponed the overall economic potential of the city.

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