Mumbai Metro One update

After signing loan agreements with six banks for the proposed Rs 2,356-crore Mumbai metro project, Mumbai Metro One (MMOPL),said it has targeted to complete the project by July 2010.MMOPL, a special purpose vehicle formed between Reliance Infrastructure, French firm Veolia Transport and Mumbai Metropolitan Regional Development Authority (MMRDA), raised Rs 1,194-crore debt from six banks.These banks are IDBI Bank, Corporation Bank, Karur Vysya Bank, Canara Bank, Indian Bank, Oriental Bank of Commerce and IIFCL (UK). "Institutional funding of a metro project is new as it involves interactions with different agencies including rolling stock, power supply, siganlling, engineering and other functions. The repayment model is also unique as for the first time, the project's assets are not charged to the lender as security," MMOPL 's Director K P Maheshwari said. The prestigious project, which will come up along the Versova-Andheri-Ghatkopar corridor, is expected to significantly reduce the traffic problems of the metropolis.The project has a debt component of Rs 1,194 crore and equity capital of Rs 512 crore while the MMRDA will provide a capital grant of Rs 650-crore. The cost of rupee debt, which constitutes about 75 per cent of the total debt, will be 12.25 per cent while the foreign currency loan will have an interest of 3.5 per cent above the libor.The repayment has also been structured in a manner that gradually increases over a period of time in sync with the increasing traffic revenue generated by the project.MMOPL started the project in February this year and has completed awarding of all rail system contracts much ahead of the stipulated time, it said.