The Eknath Shinde-led Maharashtra government has paused its plans to acquire Mumbai Metro Line 1. Instead, the State Cabinet has directed the executive committee of the Mumbai Metropolitan Region Development Authority (MMRDA) to pursue a one-time settlement of the ₹1,700 crore debt owed by Mumbai Metro One Pvt Ltd (MMOPL).
Mumbai Metro Line 1, the city’s oldest metro line, serves approximately 4.6 lakh passengers daily and is unique for being constructed under a public-private partnership model. Operated by MMOPL, a special purpose vehicle created by Reliance Infrastructure, MMRDA holds a 26% stake while Anil Ambani’s Reliance Infrastructure (R-Infra) retains a 74% share. The debt involves six banks: State Bank of India (SBI), IDBI Bank, Canara Bank, Indian Bank, Bank of Maharashtra, and IIFCL (UK). In March 2024, MMOPL agreed to settle the debt with these lenders, committing to a payment of ₹1,700 crore. An initial instalment of ₹171 crore has already been paid by MMRDA and MMOPL.
Previously, on 11th March, the state cabinet approved MMRDA’s acquisition of R-Infra’s 74% stake in Metro Line 1 for ₹4,000 crore. However, MMRDA faced financial constraints in funding this acquisition and sought state assistance, which was denied. Consequently, the state cabinet revoked the purchase decision. During a recent meeting on 26th June, the state cabinet decided to direct MMRDA’s executive committee to proceed with the one-time debt settlement. MMRDA is now taking prompt actions to implement this directive and plans to engage with all six lenders to discuss the settlement terms. Between April 2023 and June 2024, MMOPL has disbursed over ₹225 crore in interest payments to its creditors. The company was on the verge of insolvency proceedings initiated by IDBI Bank and SBI but averted this by MMRDA’s payment of ₹170 crore, representing 10% of the agreed settlement amount. When approached, officials from both MMOPL and MMRDA refrained from commenting. It was clarified that while Metro Line 1, constructed at a cost of ₹2,356 crore, is not operationally loss-making, the financially distressed Anil Ambani group intends to exit the project.
MMRDA and MMOPL have been engaged in arbitration over the construction costs of Metro Line 1. MMOPL claims the construction costs amounted to ₹4,026 crore, while MMRDA asserts that the original contract stipulated costs at ₹2,356 crore. This one-time settlement consideration by MMRDA could provide a strategic resolution to the financial impasse surrounding Mumbai Metro Line 1, ensuring continued service to its daily commuters and stabilising the financial outlook of the project.
