The Eknath Shinde government has shelved plans to acquire Mumbai Metro Line 1, opting instead for a one-time debt settlement. The state cabinet directed MMRDA's executive committee to settle the INR 1,700 crore debt owed by Mumbai Metro One Pvt Ltd (MMOPL), which is 74% owned by Reliance Infrastructure and 26% by MMRDA. Serving 4.6 lakh passengers daily, Metro Line 1 is Mumbai's oldest metro and operates under public-private partnership. Facing insolvency, MMOPL had agreed to a debt settlement with six lenders, including SBI and IDBI Bank. The MMRDA commissioner will meet with lenders to finalise the arrangement.
The Eknath Shinde government has put its plans to buy Mumbai Metro Line 1 on hold. Instead, the State Cabinet has directed the executive committee of the Mumbai Metropolitan Region Development Authority (MMRDA) to explore a one-time settlement of the INR 1,700 crore debt owed by Mumbai Metro One Pvt Ltd (MMOPL).
Metro Line 1, Mumbai's oldest metro line, serves 4.6 lakh passengers daily and is the only line built through a public-private partnership. It is operated by MMOPL, a special purpose vehicle promoted by Reliance Infrastructure, with MMRDA holding a 26% stake and Anil Ambani's Reliance Infrastructure (R-Infra) holding 74%.
Six banks are involved in the debt: State Bank of India, IDBI Bank, Canara Bank, Indian Bank, Bank of Maharashtra, and IIFCL (UK). In March 2024, MMOPL agreed to a debt settlement with these lenders, agreeing to pay INR 1,700 crore. MMRDA and MMOPL made an initial payment of INR 171 crore.
Earlier, on March 11, the state cabinet had approved MMRDA's purchase of R-Infra's 74% stake in Metro 1 for INR 4,000 crore. However, MMRDA couldn't finance this acquisition and requested state funding, which was denied, leading the state cabinet to cancel the purchase.
At a recent meeting on June 26, the state cabinet decided to ask MMRDA's executive committee to address the one-time settlement. MMRDA is now taking immediate steps to implement this decision and plans to meet with all six lenders to discuss the issue.
From April 2023 to June 2024, MMOPL has paid over INR 225 crore in interest to its lenders. The company was facing insolvency proceedings initiated by IDBI Bank and SBI but avoided this after MMRDA paid INR 170 crore, 10% of the settlement amount. When contacted, MMOPL and MMRDA officials declined to comment. Officials clarified that Metro Line 1, built at a cost of INR 2,356 crore, is not losing money operationally, but the financially troubled Anil Ambani group wants to exit the project.
MMRDA and MMOPL have been in arbitration over the construction costs of Metro Line 1, with MMOPL claiming costs of INR 4,026 crore, while MMRDA maintains the original contract cost was INR 2,356 crore.
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