India and AIIB signs $500 million loan agreement for Mumbai Urban Transport Project-3

The Central Government, the Maharashtra Government, Mumbai Railway Vikas Corporation (MRVC) and the Asian Infrastructure Investment Bank (AIIB) on Monday signed a $500 million loan agreement for Mumbai Urban Transport Project-3 to improve the suburban railway system in Mumbai.

  • The loan agreement was signed by Shri Sameer Kumar Khare, Additional Secretary, Department of Economic Affairs, Ministry of Finance, on behalf of the Government of India, Shri Sanjay Kumar, Chief Secretary on behalf of the Government of Maharashtra, Shri R. S. Khurana, Chief Managing Director on behalf of the MRVC and Shri Rajat Misra, Director General (Acting), Investment Operations on behalf of the AIIB.
  • Shri Khare said that this project will assist in improved mobility, service quality and safety of passengers of the Mumbai suburban railway system, by providing faster, more reliable and higher quality transport services compared to road-based transport. 
  • There will be direct safety benefits to passengers and the public through introduction of trespass control measures.

Demographic profile and need for MUTP-3:

  • With a population of 22.8 million (2011), Mumbai Metropolitan Region (MMR) is the most populous metropolitan region in India and is expected to reach 29.3 million by 2031 and 32.1 million by 2041.
  • This population growth represents the core driver behind Mumbai’s urban expansion, compelling the state of Maharashtra to prioritize sound urban and infrastructure planning which balances economic activities, mobility as well as the optimization of environmental and social outcomes.
  • Around 86% of Mumbai commuters rely on public transport. 
  • However, supply has not kept pace with rising travel demand. 
  • The Mumbai suburban railway network, which carries three quarters of all motorized travel (78% of passenger km or 8 million passengers per day) increasing at 3% annually, suffers from some of the most severe overcrowding in the world. 
  • User experience is further compromised by low amenity of carriages, substandard stations and station access, and serious safety concerns.
  • The MUTP-3 project is expected to increase network capacity in the region with the reduction in journey time and fatal accidents of commuters. 
  • It is estimated that 22% are female passengers who will benefit from improved safety and quality of service.

AIIB Vice President D.J. Pandian said that this project represents another major step in supporting our member countries in their efforts to provide transport capacity while removing transport bottlenecks, and thus improving the daily commuting experience of millions of Mumbaikars. In line with our Transport Sector Strategy, the Mumbai Urban Transport Project-III will also help in reducing carbon emissions by shifting passengers away from higher-carbon road transport towards efficient and convenient rail-based mobility. In addition, female passengers will benefit from improved safety and quality of service.

About MUTP-3:

  • The Mumbai Urban Transport Project Stage-3 (MUTP-3) will improve the quality of suburban Railway services in Mumbai.
  • The project is expected to be completed in the next 5 years.
  • The Centre has allocated Rs 300 crore for MUTP-3 in the budget 2020-21.
  • MUTP-3 project is jointly financed by the Asian Infrastructure Investment Bank (AIIB), Government of India & Government of Maharashtra.
  • The total estimated cost of the project is $997 million, of which $500 million will be financed by the AIIB.
  • The $310 million by the Government of Maharashtra and $187 million by the Ministry of Railways. 
  • The $500 million loan from the AIIB has a 5-year grace period and a maturity of 30 years.

Benefits of MUTP-3:

  • Additional 63.5 Kms of track will be constructed.
  • Creation of additional capacities by introducing new Suburban Corridors.
  • New Suburban Corridors will lead to development of new CBDs.
  • Reduction in fatalities due to Trespassing & falling of passengers from train.
  • Seamless travelling for longer distance suburban passengers by extending & creating corridors.
  • The Project will provide sustainable, high-capacity and safe cross-regional connectivity in Mumbai Metropolitan Region (MMR).
  • Through providing better and more efficient connections among various districts, it will improve mobility and safety of the suburban population of MMR. 

Source: PIB-Press Release

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