After a long lull, Maharashtra tries to catch up on infra development

With Rs 1.6 trillion worth of projects underway, industry experts say finance will be a key challenge

Most of Mumbai's roads, at present, have a 'work in progress' board greeting its city dwellers. Under implementation is the city's biggest metro plan, to be executed in different phases. The infrastructure activity in Mumbai is also symbolic of the more than Rs 1.6 trillion worth of projects underway across Maharashtra.  

Industry officials and experts, both, agree that the city and the state are witnessing a huge thrust on infrastructure development, which was missing for the past few years. These projects have opened up contract work opportunities worth Rs 1.6 trillion for infrastructure developers. However, the tie-up of finance for this amount will be the key challenge. In terms of a timeline, most of these projects are to be commissioned between 2019 and 2022. 

In the past one year or so, the state has got the ball rolling on various infrastructure projects. According to data compiled by Business Standard, nine of its key projects alone will entail an investment of Rs 1.6 trillion.

"We are finally seeing a lot of infrastructure activity in Maharashtra. The past few years saw Maharashtra lag while other states moved at a faster pace with their projects, this is now changing. However, the key challenge for these projects would be on how the state agencies manage the funds for the same," said Shubham Jain, vice-president and group head for corporate ratings at ICRA. Most of these projects are either under implementation or will be implemented through the work-contract model. This, in turn, will require the state agency implementing these projects to source funds upfront. 

One model under consideration to fuel Maharashtra's infrastructure growth, according to sources, is to find ways to use cash flow from operational road projects, which have or will reach maturity, like the Mumbai–Pune Expressway.  

At the recently concluded Asian Infrastructure Investment Bank (AIIB) annual meeting in Mumbai this week, Maharashtra Chief Minister Devendra Fadnavis said, "When AIIB V-P Danny Alexander came to me to discuss the flow of this meeting, I handed him a list of projects and he was kind enough to tell our bank is not as big as you think that we can handle these many projects." On the sidelines, the minister added that talks to tie-up funds for various projects are underway. 

Officials and analysts agree that Maharashtra has finally picked up the pace in infrastructure investments, albeit a little late. "In Maharashtra, things are happening faster than the pace they generally were working at. There is definitely an upswing. They are finally implementing projects that should have been undertaken much earlier," said an official from an infrastructure company on the condition of anonymity. 

Mumbai's metro project and the Mumbai-Nagpur Expressway contribute a major part of the Rs 1.6 trillion worth of projects. "In terms of value, Maharashtra looks significant at the moment compared to other states. But, most of these are chunky projects. In terms of the number of projects, other states are more broad-based," Jain added.