Maharashtra State Cabinet Approves Purchase of Mumbai Metro One from Anil Ambani

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The state cabinet of Maharashtra has given its preliminary nod to the acquisition of the Ghatkopar-Versova Mumbai Metro One, which is jointly owned by Reliance Infrastructure Limited (R-Infra) led by Anil Ambani and the Mumbai Metropolitan Region Development Authority (MMRDA). Anil Ambani’s stake in the venture has been estimated at ₹4,000 crore.

Mumbai Metro One, initiated in 2007, marked the first metro project under the Build-Operate-Transfer (BOT) policy. The joint venture, Mumbai Metro One Pvt Ltd (MMOPL), has MMRDA holding a 26% stake while Ambani’s R-Infra holds the majority 74% stake. Initially met with resistance from several MMRDA commissioners, the project faced ongoing disputes.

The valuation of R-Infra’s stake was determined by a report presented by retired IAS officer Johny Joseph, employing the discounted cash flow model and based on guidance from financial advisory firm KROLL. The panel’s report was endorsed by the state cabinet.

Despite being one of the busiest metros, Mumbai Metro One faced operational challenges, with R-Infra’s MMOPL asserting continuous losses. MMRDA raised concerns regarding commercial utilization of metro premises and ticketing structures, rejecting fare hike proposals by MMOPL.

Controversies also surrounded project costs, with discrepancies between MMOPL’s claims of ₹4,026 crore and MMRDA’s counter of ₹2,356 crore for construction expenses. Additionally, BMC sought property tax payments from MMOPL. Amidst losses exacerbated by the Covid-19 pandemic, MMOPL approached the government and MMRDA in 2020, proposing stake acquisition.

Former Chief Minister Prithviraj Chavan highlighted concerns over the acquisition price, citing advice that it was excessively high. He criticized the government’s favoritism towards the Anil Ambani group amidst the ongoing dispute.

The state government’s decision marks a significant development in the ongoing saga surrounding Mumbai’s metro infrastructure, with implications for both public transport and private investment in critical infrastructure projects.

Sources By Agencies