Maharashtra Cabinet approves acquisition of MMRDA-Reliance Infra joint venture from Anil Ambani, resulting in sale of Mumbai Metro One

Anil Ambani’s Reliance Infrastructure Limited (R-Infra) and the Mumbai Metropolitan Region Development Authority (MMRDA) jointly own Mumbai Metro One, a public-private partnership project that has received in-principle approval from the Maharashtra Cabinet led by Eknath Shinde. Ambani is worth ₹4,000 crore for his 74% ownership in the business.

The 2007 Build-Operate-Transfer (BOT) model’s first metro project in the city, Mumbai Metro One, has been the focus of disagreements among the joint venture partners. According to the report, R-Infra owns the majority 74% of the company, Mumbai Metro One Pvt Ltd (MMOPL), while MMRDA owns 26% of the company.

A report by a retired IAS officer and former chief secretary valued R-Infra’s stake at ₹4,000 crore, which was approved by the state cabinet on Monday. Government sources state that the Joseph-led panel used the discounted cash flow model and the KROLL financial advisory report to arrive at the valuation figures.

A number of issues, including the project’s costs, the commercial exploitation of metro premises, the ticketing structure, and fare hike demands by MMOPL, have plagued the MMRDA-Reliance Infra joint venture. MMOPL has continuously claimed losses despite being the busiest metro to date, but MMRDA has contested these claims and rejected requests for fare increases.

The project’s expenses have also been a source of contention. MMRDA asserted that the real cost of construction was ₹2,356 crore, while MMOPL claimed a cost of ₹4,026 crore. The Brihanmumbai Municipal Corporation (BMC) had also requested that MMOPL pay property taxes. The report went on to say that MMOPL wrote to the state government and MMRDA in 2020, in the midst of losses caused by the COVID-19 pandemic, asking them to purchase its stake.

A former chief minister who claimed there was disagreement over the purchase price criticized the decision. The government was advised by financial and legal experts that the quoted price was excessively high. But the Anil Ambani group is being favoured by this government.