Three decades later, Mumbai's Trans Harbour Link to become a reality

For India, building a 22-km bridge connecting the island to the mainland through sea, would be a feat to be achieved for the first time

The more than three-decade-long wait for Mumbai’s most ambitious infrastructure project, the Transharbour Link, has ended as the project inches closer to execution. 

Though the project has been attempted several times in the past, industry experts are hopeful this time the ride will be smoother.

Engineering conglomerate Larsen & Toubro (L&T) last month announced it was the lowest bidder to construct Package 1 and Package 3 of the project. On Monday, Tata Projects announced it would be executing Package 2, which is to be built completely in the sea.

The Mumbai Transharbour Link has been on the drawing board since the 1970s. Veterans like Ajit Gulabchand said plans to link the island city to the mainland had been around ever since Independence. This delay has beyond doubt contributed to escalating the project cost. An earlier estimate when the project reached the bidding stage in 2013 was around Rs 9,000 crore. The project at present is likely to cost around Rs 17,000 crore. However, industry experts said it would be unfair to compare project cost as the engineering specifications would vary. “This is a long overdue project. I believe since the time of Independence we have been thinking about having a link. Several attempts were made and several discussions happened on whether it should be a tunnel or a bridge. All these ideas came up, but nothing materialised,” said Gulabchand, chairman and managing director, Hindustan Construction Company (HCC), which constructed the Mumbai Sea Link project. HCC was also one of the bidders for the Mumbai Transharbour Link project, but did not make the lowest bid.

In a city where real estate commands a premium, the changing dynamics of the property market have played a crucial role in giving the project a start. “At that time, Nariman Point was the only central business district. Now, Mumbai itself has four. There is a clear visibility on Panvel emerging as an urban area. At one point of time, real estate prices were a function of distance from Nariman Point. Those days of Nariman Point are now gone,” said an industry expert.

In addition to the changing real estate values, the proposed Navi Mumbai Airport has also contributed in putting the project on the fast track.  It is crucial for the city to have a link connecting the island city to the upcoming airport to make the airport project a success. While the Navi Mumbai airport is expected to start operations by 2019, the Mumbai Transharbour Link is likely to be completed by the first half of 2022.

“For the success of the new airport on the other side, accessibility is important. We are talking about building one of the biggest airports in the world. A whole airport-based city will come up in New Mumbai. This has given a push to the link project. In addition, new Mumbai has also developed a lot, making connectivity important,” Gulabchand added.

While, the airport and real estate requirements have given the project a push, roping in funding from Japan International Cooperation Agency has addressed execution and funding woes. “The project could not take off earlier as the market forecast for revenue from the project may not have worked. This time, the risks have been considerably minimised due to it being a cash contract, unlike the earlier models where market risks were involved,” said Jagannarayan Padmanabhan, director, transport and logistics, ýCRISIL Infrastructure Advisory.

In 2008, the Anil Dhirubhai Ambani Group emerged as the lowest bidder for the project. It, however, did not move beyond that stage for various reasons. In 2013, when the project was once again put to bid, the nodal authority did not receive any bids. In the latest round of bidding, the three packages put together received 17 bids. Of these, 10 bids qualified for the next round. In addition to Tata Projects and L&T, HCC, Simplex Infrastructure and ITD Cementation were among others interested in the project. 

“Earlier, the attempt was to bundle both financing and execution under the public-private partnership model. The aim to transfer the demand risk to the investor did not work. What is working now is the fact that we have received Japanese funding and this provides the government the flexibility of selecting a good contractor,” said Manish Agarwal, leader, infrastructure, PricewaterhouseCoopers (PwC). “What will still be a challenge is providing strong project management oversight from the government side. But Japanese funding normally comes along with expertise to manage the project,” he added.

For India, building a 22 km bridge connecting Mumbai island to the mainland through the sea will be a feat achieved for the first time. Vivek Singhal, chief operating officer, urban infrastructure, Tata Projects, admits the project is a challenging one. “We are working in the sea, so we should have a good strategy in selecting the machines and we need special lifting cranes based on barges. These barges will be imported and we will also have our yard for pre-casting,” he said. 

The project, Singhal added, also involved procurement and prefabrication of steel outside India. “Two Japanese companies will procure steel abroad, fabricate it abroad and erect steel structures on the sub-structure, which is a first for India. The fabrication happens somewhere in Southeast Asia,” Singhal added.

Once the financing and execution issues have been addressed, the nodal authority, Mumbai Metropolitan Region Development Authority, will need to focus on the revenue possibilities. “The project will create land value appreciation on the other side. Capturing a share of that may yield more value than toll. So if the government does want to monetise the project, instruments like impact fees or betterment charges may be considered instead of toll. Such charges have been used in Pune and Ahmedabad in the context of urban transport as a levy on real estate transactions,” Agarwal from PwC added.

Industry experts do not expect the project to face major public resistance or environment regulation hurdles. Some like Gulabchand add there may be a case for one more link project. “There should be another connector, which should be a tunnel, to the island of Mumbai,” he said. A lot will, however, depend on the successful operation of the Mumbai Transharbour Link.