The Maharashtra government has sanctioned a financial mechanism to enable the Mumbai Metropolitan Region Development Authority (MMRDA) to borrow loans from foreign financial institutions (Express Photo)The Maharashtra government has sanctioned a financial mechanism to enable the Mumbai Metropolitan Region Development Authority (MMRDA) to borrow loans from foreign financial institutions against six under-construction Metro corridors. The Metro corridors include Metro Line 5 (Thane-Bhiwandi-Kalyan), Line 6 (Swami Samarth Nagar-Vikhroli), Line 7A (Dahisar East to Mumbai Airport), Line 9 (Dahisar East to Mira Bhayander), Line 10 (Gaimukh to Shivaji Chowk, Mira Road), and Line 12 (Kalyan to Taloja).According to the government resolution issued last week, the state government will provide contingent liability support for the loans MMRDA borrows from bilateral or multilateral organisations or other financial institutions. “The loans will be borrowed either on a back-to-back basis or by any other appropriate method. The interest rates on these loans are likely to be concessional,” read the resolution.Although the state had previously cleared these lines in earlier Cabinet decisions, difficulties in availing foreign-assisted loans prompted the government to intervene.The state has also made it clear that MMRDA would primarily be responsible for repaying the interest, fees, and principal amount of the loan. But, the state as a guarantor would pay the dues in case of default or exceptional circumstances, the resolution said.The state has also mentioned that MMRDA will shoulder the additional financial burden if there is any delay, cost overruns for litigation, or other unexpected reasons.An MMRDA officer said, “This backing by the state government provides funding certainty and enables us to go ahead with loan arrangements needed for these important infrastructure projects.”The resolution also empowers MMRDA and the Urban Development Department to execute loan agreements with banks and project and financial agreements with the Centre, wherever necessary. The terms, interest payments, repayment timeline, and conditions of the external financial assistance will be set out in these agreements.Story continues below this adThe official further said, “The loan process was at an advanced stage, but needed the state to intervene for guarantee and risk mitigation. With this clearance, we are getting closer to arranging the funds and completing project timelines.”Stay updated with the latest - Click here to follow us on Instagram© The Indian Express Pvt LtdTags:mumbai metro