Meltdown may hit infrastructure projects in Mumbai

The global meltdown is likely to affect infrastructure projects in the city and in the region, sooner than expected.

Several infrastructure projects in the state undertaken by the government, its corporations and civic bodies are likely to suffer due to the economic slowdown. The ones, which may be directly affected are the Built Operate and Transfer(BOT) projects.

Minister for Public Works (Undertaking) Anil Deshmukh admitted that the water transport project connecting the western suburbs of Mumbai to the island city, has been hit as companies bidding for the project have asked for more time when the last date was November 6.

U P S Madan, project manager of MTSU said, “The ongoing projects and the ones which have an earmarked fund will not suffer, but the ones which have been planned for the future and the BOT ones could take a hit. But there is no need to pull out a red flag now.”

Phase I of the Metro has already taken off and the tenders of phase 2 have already been issued. But the ones which need funding in future could be affected. Madan said that liquidity has become a problem with the private and government sector.

MMRDA sources added that nine metro rail corridors were planned for the city, discussions haven been held on starting four of them together. This plan could probably get affected.

Madan said that the meltdown will ultimately affect both the private sector and the government. The MMRDA generates its funds for city infrastructure projects from the sale of its plots. As real estate prices have fallen, selling plots will no longer generate the same cash flow as was seen in earlier cases.

Officials of one of the largest construction firms in the country, Hindustan Construction Company(HCC) which is constructing the Bandra-Worli sealink, say that they have not been affected yet. An HCC spokesperson said, “All our large projects have finances, so there is no problem. The meltdown might affect future projects but not our ongoing ones, we are also expecting the government to invest more in infrastructure,” he said.

Deshmukh said, “Even our ongoing projects have been affected. Contractors are asking for more time as banks have made it tougher for them to avail of loans.” Even the Dharavi redevelopment project is likely to be affected. Top MHADA officials said that one of the 19 interested companies did not turn up at pre-bid meeting held a few weeks ago.

MMRDA commissioner Ratnakar Gaikwad says that the depression may not adversely affect the MMRDA’s projects. “I also look at the positive effects of the slowdown. Prices of cement and steel are coming down and this will give a boost to the projects.”

A senior railway officer said that the completion of several railway projects may get affected as the availability of funds will be a problem for the contractors.