Maharashtra Government

Maharashtra Govt To Provide Rs 2,500 Cr Fund For Versova-Bandra Sea Link

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Maharashtra Govt To Provide Rs 2,500 Cr Fund For Versova-Bandra Sea Link

Maharashtra Govt To Provide Rs 2,500 Cr Fund For Versova-Bandra Sea Link

In a bid to fast track the long awaited infrastructure project Versova-Bandra Sea Link (VBSL), Maharashtra government has decided to provide viability gap funding of Rs 2,500 crore, that is collected as a premium for extra Floor Space Index, sold to real estate developers. Usually, the viability gap finance is provided to support infrastructure projects that are economically justified, but not financially viable.

Being built at an expense of Rs 9,500crore, VBSL would be a toll-route which will be applicable till 2052. The Maharashtra State Road Development Corporation (MSRDC) will appoint two separate contractors for toll collection and repairs and maintenance of VBSL, as per the government resolution.

It was in December last year when the Maharashtra government has given administration approval to the proposed link road. The sea link would be 9.2-km long and would serve as an extension to the existing Bandra-Worli Sea Link. Once operational, the commuters travelling to south Mumbai from Western Suburbs can skip the Western Express Highway and can use sea links for the commute which would have connectors at Bandra, Otters Club, the Juhu Link Road and the Versova Link Road.

Sea Link to cut the congestion

Currently, one has to take the Western Express Highway to reach south Mumbai from the western suburbs and have to pass through congested areas such as Borivali, Andheri, Juhu, Mahim, etc. The journey usually takes 60-90 minutes during peak office hours. With the new road, the travel time would be reduced to 12 minutes. The connectivity is expected to improve further by a series of roads and tunnels. The construction would begin in the first half of 2018 as the bids for the tenders have been invited from the shortlisted qualified bidders. A special purpose vehicle will be formed to raise loans from banks and non-banking institutions.

Timeline of VBSL 

The sea link was approved by the Cabinet Committee on Infrastructure (CCI) eight years back in 2009. The original cost of the project was Rs 5,975 crore which has now been escalated to Rs 9,500 crore. The state government took four years to get the clearance from the Coastal Regulation Zone (CRZ) and Environment Ministry, which was finally spelled out in January 2013. Thereafter, CM Devendra Fadnavis on April 29, 2016 directed the MSRDC to construct the VBSL on an engineering, procurement and construction basis.

How VBSL will impact Mumbai's property market

VBSL can be a game changer for Mumbai real estate market as it would improve connectivity between the suburbs and the main commercial business district. With traveling time coming down to 12 minutes from 60 minutes with a projected toll tax of Rs 60, mid-segment buyers would make way to housing hubs near Versova such Kandivali, Borivali, Mira Road. Though the property prices here too have crossed Rs 9,000 per sqft, the growing connectivity would further boost the property prices in the upward direction. With enhanced connectivity from the farther suburb, the crowded areas of Andheri, Chembur, Ville Parle are expected to be decongested and the excessive pressure on the express highways would be relieved. However, this could make the already expensive property market of Mumbai unaffordable for the homebuyers as the new infrastructure is speculated to make the cost of buying a home in Mumbai unrealistic. For instance, 2BHK in Goregaon is available at an average price of Rs 1.78 crore while in Andheri, a similar sized property is available for at least Rs 2 crore. Kandivali offers a 2BHK for Rs 1.38 crore while Borivali will offer a similar property between Rs 1.5-2 crore. A marginal surge was noticed in property prices between March-Dec 2013 in each of these localities as the VBSL project entered the final stage and got environment clearance. The rise would be visible once the construction begins. 

- by Surbhi Gupta

Source : PropTiger

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