Rail to take Rs 11,000 crore loan for MUTP-III

The Railways on Sunday declared that it would repay the loan of its share of the Mumbai Urban Transport Project III (MUTP) at seven per cent annually until 2038. It will be taking a loan from the World Bank for its share of the project costs. The state government and the Railways will be sharing the expenditure for the project.

The move was made after the Niti Aayog asked the Railways how it plans to repay the debt as the Mumbai suburban has been running at a great loss.

According to the latest estimates, MUTP III will cost approximately Rs 11,000 crore and the Railways will be contributing Rs 5,500 crore to it after borrowing it from the World Bank. Interestingly, the bank had cracked the whip on the Railways last year, when its managing director Mulyani Indrawati visited the city and said that unless the Mumbai suburban is made safer, the loan will not be approved.

However, railway officials said even if the conditions were met, the arrangement of loan repayment is being reviewed by both the railway board and the ministry as they find it “overwhelming”. “The problem is that every MUTP is getting costlier and going by the debt that the Railways is under, it is being seen as we have bitten off more than we can chew,” said a railway official under the condition of anonymity. He further said, “In fact MUTP II-whose works are still underway, was comparatively worth Rs 4,000 crore. Now at Rs 11,000 crore, the expenditure over MUTP III is more than double the cost of part II. And the EMI will be paid off in two decades.”