CM Fadnavis seeks funds from South Korea, Malaysia

Mumbai: Apart from Indian bankers, the state government and MSRDC (Maharashtra State Road Development Corporation) are negotiating with financial institutions from Malaysia and South Korea for funding of chief minister Devendra Fadnavis’ Mumbai-Nagpur Samruddhi Mahamarg project despite assurance from an UAE-based financial institution at the recently concluded Magnetic Maharashtra event.

The cost of the project has risen to Rs 49,247 crore from Rs 46,000 crore and now, the tension is mounting in terms of its funding. SBI Caps is the fund manager for the project. The state government has given its nod for concessional agreements, which will be done by the SPV-led MSRDC with the bankers for raising funds. When the cost of the project was estimated as Rs 46,000 crore, the loan component was 76 per cent i.e. Rs 35,000 crore with 24 per cent as equity. After rise in the cost of the project, the loan burden will increase, said senior officers.

In the Magnetic Maharashtra event organised recently, an UAE-based financial institution had given an assurance of funding the entire project. But later on, talks remained inconclusive. Indian bankers are placing many conditions on the state government with a view to safeguarding their interests, however the state government is not comfortable with the same. So the CM and MSRDC are looking towards financial institutions from Malaysia and South Korea.

However, taking loans from foreign lenders may be risky as they provide loans in dollars. The rupee is declining against the dollar and foreign loans are set to become more costly. Yet, funding the CM’s pet project is more important than the interest rate for the project. So, MSRDC is also exploring the option of foreign bankers, said senior
officers.