Maharashtra Govt to Settle Reliance Infrastructure’s Rs 1,700 Crore Metro Debt Amid MMRDA Push

The Maharashtra government is moving to settle the Rs 1,700 crore debt owed by Mumbai Metro One Pvt Ltd (MMOPL), a Reliance Infrastructure company, despite shelving plans to buy Metro 1. The state’s cabinet has instructed the Mumbai Metropolitan Region Development Authority (MMRDA) to consider a one-time payment to clear MMOPL’s debt.

Key Details:

• Metro 1, Mumbai’s oldest metro line, currently serves 4.6 lakh passengers daily.
• It is operated by MMOPL, a special purpose vehicle promoted by Reliance Infrastructure (R-Infra), with MMRDA holding a 26% stake and R-Infra holding 74%.
• The debt is owed to six lenders: State Bank of India (SBI), IDBI Bank, Canara Bank, Indian Bank, Bank of Maharashtra, and IIFCL (UK).

In March 2024, MMOPL agreed to a debt settlement with these lenders, committing to pay ₹1,700 crore. An initial payment of ₹171 crore has already been made.

Background:

• The state cabinet had approved the purchase of R-Infra’s 74% stake in Metro 1 for ₹4,000 crore by MMRDA in March, which would have let MMOPL exit the project.
• MMRDA could not fund this buyout and sought state support, which was denied. This led the state cabinet to reverse the purchase decision.

Current Situation:

• At a cabinet meeting on June 26, it was decided to instruct MMRDA’s executive committee to discuss the debt settlement. Immediate action was ordered for the cabinet’s decision to be implemented.
• MMRDA plans to meet the six lenders of MMOPL to resolve the issue.
• MMOPL has been paying interest on the debt, totaling more than ₹225 crore from April 2023 to June 2024.

Insolvency Proceedings:

• IDBI Bank and SBI initiated insolvency proceedings against MMOPL due to unpaid dues.
• The National Company Law Tribunal (NCLT) dismissed these cases after MMRDA paid ₹170 crore, 10% of the settlement amount.

Comments and Context:

• MMOPL and MMRDA officials declined to comment on the matter.
• Despite not making operational losses, the Anil Ambani group wants to exit the Metro 1 project due to financial troubles.
• The construction of Metro 1 cost ₹2,356 crore, but MMOPL claims the actual cost was ₹4,026 crore. This discrepancy led to arbitration with MMRDA.

Metro 1 History:

• The agreement between MMRDA and MMOPL was signed in 2007, and the metro line began operations in 2014.

The government’s move aims to settle the debt and stabilize the metro’s operations, ensuring continued service for Mumbai’s commuters.