The Mumbai Metropolitan Region Development Authority (MMRDA) is considering a one-time settlement of the INR 1,700 crore debt that Mumbai Metro One Pvt. Ltd. (MMOPL) owes its lenders. This was recommended to MMRDA by the Maharashtra government.
This came days after the state government decided to withdraw its plan to purchase the Mumbai Metro 1 line. The purchase decision was originally made in March.
In March, the state cabinet approved the purchase of R-Infra's ownership in Metro-1. However, MMRDA had announced that it could not provide the INR 4,000 crore required for the acquisition.
The Metro 1 line is the only public-private partnership in the city's metro network. MMOPL, a special-purpose vehicle (SPV), operates the line. The MMRDA owns 26% of MMOPL, while Anil Ambani's Reliance Infrastructure (R-Infra) holds 74%.
The six lenders involved are the State Bank of India, Indian Bank, IDBI Bank, Bank of Maharashtra, Canara Bank, and IIFCL (UK).
MMOPL has regularly paid around INR 225 crore in interest to lenders from April 2023 to June 2024. The company faced insolvency proceedings in the National Company Law Tribunal (NCLT).
IDBI Bank filed for bankruptcy in October 2023 due to debts of INR 133.37 crore, and SBI did the same in August 2023 with defaults of INR 416 crore. The NCLT resolved the proceedings after MMRDA paid INR 170 crore. This was 10% of the settlement amount.
Officials noted that despite financial difficulties, Anil Ambani's group did not face operational losses with Metro Line 1. The line, costing INR 2,356 crore, has been operational since 2014. The MMRDA and MMOPL signed the concession agreement in 2007.
MMOPL and MMRDA are also involved in an arbitration case over increased construction costs for Metro Line 1. MMRDA maintains that the construction cost was INR 2,356 crore according to the original agreement, while MMOPL claims it was INR 4,026 crore.
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