The Eknath Shinde-led Maharashtra Cabinet has given an in-principle approval for the acquisition of Mumbai Metro One, a public-private partnership project jointly owned by Reliance Infrastructure Limited (R-Infra), led by Anil Ambani, and the Mumbai Metropolitan Region Development Authority (MMRDA). Ambani’s 74 per cent stake in the venture has been valued at ₹4,000 crore, according to a report by The Hindustan Times.
Mumbai Metro One, the city’s first metro project undertaken under the Build-Operate-Transfer (BOT) model in 2007, has been the subject of disputes between the joint venture partners. MMRDA holds a 26 per cent stake in the entity, called Mumbai Metro One Pvt Ltd (MMOPL), while R-Infra holds the majority 74 per cent stake, as per the report.
On Monday, the state cabinet approved a report by retired IAS officer and former chief secretary Johny Joseph, which valued R-Infra’s stake at ₹4,000 crore. The Joseph-led panel employed the discounted cash flow model to arrive at the valuation figures, utilising the report of KROLL, a financial advisory firm, according to government sources, as quoted by HT.
The MMRDA-Reliance Infra joint venture has been fraught with disputes over various issues, including the project’s costs, commercial exploitation of metro premises, ticketing structure, and fare hike demands by MMOPL. Despite being the most crowded metro to date, MMOPL has consistently claimed losses, while MMRDA has questioned these claims and rejected fare hike demands.
The project’s costs have also been a point of contention, with MMOPL claiming a construction cost of ₹4,026 crore, which MMRDA refuted, stating that the actual cost was ₹2,356 crore. Additionally, the Brihanmumbai Municipal Corporation (BMC) had asked MMOPL to pay property tax. In 2020, amid losses during the COVID-19 pandemic, MMOPL wrote to the state government and MMRDA, requesting them to buy its stake, the report further added.
Former chief minister Prithviraj Chavan criticised the decision. “There was a dispute about the acquisition price. The financial and legal advice to the government was that the price quoted was very high. But this government is favouring the Anil Ambani group,” Chavan was quoted as saying in the report.