MRVC signs $500 Million Loan Agreement with AIIB to Improve Mumbai Suburban Railway

Mumbai Railway Vikas Corporation and the Asian Infrastructure Investment Bank (AIIB) Monday (24th August 2020) signed a loan agreement for a $500 million Mumbai Urban Transport Project-III to improve the network capacity, service quality and safety of the suburban railway system in Mumbai.

The development clearedfinancial hurdles in several crucial railway projects of Mumbai, including third and fourth lines between Virar and Dahanu, new suburban corridor between Panvel and Karjat, new suburban link between Airoli and Kalwa and trespass control on mid-section.

The loan from the AIIB has a five-year grace period and a maturity of 30 years. The total estimated cost of the MUTP 3 is Rs 10,947 crore, out of which Rs 3,500 crore will be financed by the AIIB. This project was given cabinet approval in December 2016.

MRVC started talks with banks and financial institutions after negotiations with the World Bank had reached an impasse over the funding of MUTP 3 in November 2018. Around 58 hectares of land needs to be acquired for the Virar-Dahanu project, which has a completion cost of Rs 3,578 crore, while 33 hectares of land needs to be acquired for the Panvel-Karjat corridor which is expected to cost Rs 2,782 crore.

“The process of land acquisition for Virar-Dahanu third and fourth lines and new suburban corridor between Panvel and Karjat has already started. Apart from that work of new station buildings at Digha of AiroliKalwa line is also on but after loan agreement with AIIB these works will get a new speed,” said an MRVC official.

With a population of 22.8 million (2011), Mumbai Metropolitan Region (MMR) is the most populous metropolitan region in India and is expected to reach 29.3 million by 2031 and 32.1 million by 2041. This population growth represents the core driver behind Mumbai’s urban expansion, compelling the state of Maharashtra to prioritize sound urban and infrastructure planning which balances economic activities, mobility as well as the optimization of environmental and social outcomes.

Around 86 per cent of Mumbai commuters rely on public transport. However, supply has not kept pace with rising travel demand. The Mumbai suburban railway network, which carries three-quarters of all motorized travel (78 per cent of passenger-km or eight million passengers per day) increasing at three per cent annually, suffers from some of the most severe overcrowding in the world.

Before the lockdown, 19 pairs of local services running were running between Virar and Dahanu, but after completion of this project the frequency will be improved and commuters will able to get trains service at every 15 to 20 minutes. Similarly, Airoli-Kalwa line will not only help decongest the Thane railway station, but also provide direct connectivity between Kalyan and Navi Mumbai.

These projects will also help in controlling the deaths on tracks. In the suburban section of the city, on average, eight deaths occurred daily before the lockdown. Out of this, around 60 per cent are related to trespassing.

The loan agreement was signed by Sameer Kumar Khare, additional secretary, department of economic affairs, ministry of finance on behalf of the Government of India, Sanjay Kumar, chief secretary, on behalf of the Government of Maharashtra, RS Khurana, chairman and managing director on behalf of the Mumbai Rail Vikas Corporationand Rajat Misra, director general (acting), investment operations on behalf of the AIIB.

AIIB vice president DJ Pandian said that this project represents another major step in supporting member countries in their efforts to provide transport capacity while removing transport bottlenecks, and thus improving the daily commuting experience of millions of Mumbaikars.

“In line with our transport sector strategy, the Mumbai Urban Transport Project 3 will also help in reducing carbon emissions by shifting passengers away from higher-carbon road transport towards efficient and convenient rail-based mobility. In addition, female passengers will benefit from improved safety and quality of service,” Pandian said.