Anil Ambani’s R-Infra to Relinquish Mumbai Metro One Stake: State Cabinet Offers Approval
Mumbai, 12th March 2024: The Mumbai Metro One project, initiated in 2007 under the Build-Operate-Transfer (BOT) policy, marked the first venture of its kind. A joint venture named Mumbai Metro One Pvt Ltd (MMOPL) was formed, with the Mumbai Metropolitan Region Development Authority (MMRDA) holding a 26% stake, while the remaining 74% was owned by Anil Ambani’s Reliance Infrastructure Limited (R-Infra).
The state cabinet has given tentative approval to the acquisition of the jointly owned Ghatkopar-Versova Mumbai Metro One, shared between R-Infra and MMRDA. An estimated value of ₹4,000 crore has been assigned to Ambani’s stake. Notably, the project initially faced resistance from some MMRDA commissioners who opposed collaboration with a private entity.
The decision follows the endorsement of a report by retired IAS officer Johny Joseph, the former chief secretary. The evaluation of R-Infra’s 74% stake, using the discounted cash flow model, was conducted with guidance from the financial advisory firm KROLL. Throughout the joint undertaking, disagreements between MMRDA and R-Infra were prevalent, ranging from financial losses claimed by R-Infra to disputes over commercial exploitation of metro premises, ticketing structures, and fare adjustments.
Contentious issues extended to project costs, with MMOPL asserting a construction cost of ₹4,026 crore, countered by MMRDA’s claim of ₹2,356 crore. Additionally, the Mumbai Metro One faced challenges such as the BMC requesting property tax payments. In 2020, amid losses attributed to the COVID-19 pandemic, MMOPL expressed its intention for the state government and MMRDA to acquire its stake.
Former Chief Minister Prithviraj Chavan highlighted a dispute over the acquisition price, expressing concerns about the perceived favouritism towards the Anil Ambani group by the current government.
