Mumbai Metropolitan Region Development Authority (MMRDA) recently issued Request for Quotation (RFQ) for the much-awaited trans-harbour link from Mumbai's Sewri and Nhava and Jawaharlal Nehru Ports, with further linkages to other ports. Rahul Asthana, Metropolitan Commissioner, MMRDA, spoke with Shashidhar Nanjundaiah and Pratap V Padode on how the project will transform the hinterland. This interview was conducted before the RFQ was issued.What is the mode of delivery in the soon-to-be-revived Mumbai Trans Harbour Link (MTHL)? Is the road itself the actual delivery product?The trans-harbour link includes 16.5 km on sea and 5.5 km on land, including the interchanges on both sides. We thought a lot about whether we should offer the interchanges as a part of the DBFOT concession, and finally decided to do so, because the concessionaire would feel very jittery in case somebody else was doing the interchanges and he was responsible for the bridge because the interchanges are not ready in time then there could be overruns.The road will be a six-lane, divided carriageway. Since the bridge itself will be to the north of the shipping lanes-which travel south from the ports-the type of bridge is flexible, but I believe there will be long spans across the Thane Creek that it will scale.It will be a PPP project in which a maximum 40 per cent of viability gap funding (VGF) will be done. MMRDA would give a fifth of the project cost as a soft loan to make it more viable, because we are apprehensive about the 40 per cent limit from the Government of India. That is over and above the 40 per cent which VGF would be given and 20 per cent is the soft loan which MMRDA would give.We will bid it out on the contract in September next year and aim to complete the MTHL by 2017.How will the bidding selection be done? We will try what's not yet been tried in the country: compensate L2 and L3 for the cost of the bid subject to a maximum cap, I do not know what the cost of their bid would be, it will be subject to who they employ. But we will have our own estimate and may be 70-80 per cent of that estimate would be compensated.Has the VGF already been mobilised?The State Government's VGF will be given by MMRDA-we have the money. The RFQ will be coming out very soon and the approval for VGF will be placed before the central government, simultaneously with notifying RFQ. The Government of India has already given its in-principle approval for VGF to this project, so we just need to renew it. As you know, this project was bid out twice before, unsuccessfully. We are very keen this time that this will go through.What will the project accomplish for the port? What post-link development do you foresee in port traffic and hinterland development?The MTHL is not merely a bridge for transport across the Thane Creek: it is a game changer as it will link the city of Mumbai to the mainland, decongest the city and be a boon to the Jawaharlal Nehru Port and to the Mumbai Port, which has a new offshore container terminal coming up. This container terminal, located about 800 m into the sea, will have access from the docks via MTHL to go on to the mainland. Container liners have fixed ports. So there is a lot of cross traffic from JNPT and a lot of traffic that will go from BPT. That is something we hope will work out and also give returns to PPP operators.Has the report from Arup and KPMG been finalised?It has been finalised but the formal report is yet to come, including issues like costing, financial model, technical details and design. The design is only indicative on what we have based our costs. The concessionaire is free to do his own design subject to the parameters of the Indian government.So is the RFQ based on this final report?Yes, in fact the RFQ document is already been made and will be advertised in a week.Doesn't the Port Trust land come into play in this case?The interchange I am talking about is going to be on the Bombay Port Trust land. In principle, they seem positive about it. The important point in interchange there will be a Worli connector in interchange. It will be from Sewree to Worli, an elevated portion. The Eastern freeway is already being built on that land which will be ready by December next. So it will connect to the Eastern Freeway for north-south movement and to the Worli connector for the east-west movement. On the mainland, it lands at Chirley, Navi Mumbai, connecting onwards to the Mumbai-Pune Expressway and JNPT.And now the Dighi Port is one of the clusters being identified, so do you have to keep that in mind? Yes; in fact we are in the process of aligning a separate multimodal corridor for which DPR is completed. This corridor will align itself to connect with the Delhi-Mumbai Industrial Corridor (DMIC) as well as with the MTHL. Chief Minister of Maharashtra Prithviraj Chavan reviewed the project and he rightly felt that the MMC-DMIC connection should be established.But is the Mumbai Trans Harbour Link itself planned to be multimodal?We have planned the metro as a part of the MTHL. The question before us was whether to place the six-lane highway and the metro rail on the same level or separately. Technical consultants told us that having a metro is technically infeasible on the same level as it posed difficulties at the interchanges. Because you have a three-level interchange today without the metro and with the metro it becomes even more complicated. If the metro rail will only come up, say, seven years hence, it is an unviable proposition to build the infrastructure now. So while the metro is a part of the MTHL, we will bid it out in a subsequent phase, maybe 3-4 years later.How is land acquisition?Land acquisition is not too bad because 70 ha out of 100 ha of land have already been acquired. We only need the right of way (RoW) over that and the cloverleaf interchanges. On the island (Mumbai) side there is no land acquisition since the Bombay Port Trust (BPT) land alone is acquired.You have asked for maximum VGF, over and above which you are providing a loan of up to 20 per cent. How do you see the viability of the project?It is viable. As I said, we need to ensure that it is successful the first time when we are doing it. The concessionaire only needs to raise 40 per cent on his own through his own equity and debt. Ultimately, the interest rate in construction gets reduced because of the soft loan we will provide during the construction period. What we have looked at is the financial modelling that our consortium of consultants has advised us as viable.We are looking at all kinds of innovative methods of risk evaluation: For example, if the traffic projection is less than what we have stipulated by, say, 10 per cent, we could share the revenue losses below 90 per cent of the traffic, thereby reducing the risk of the concessionaire. On the flip side, if it goes above 110 per cent then we will take a proportionate share of the profits. I am confident, though, that the traffic will be high.When do you see this project start making any money according to your projections?We have a certain interest rate we have offered, so it will depend on what that interest rate will be plus how they raise their money, etc. Certainly on a net present value (NPV) based on 40 years, they would make money.Does that take into account the new airport? It takes into account the new airport but lot of it will be traffic which is actually because of the development of certain roads on Navi Mumbai side because of this trans-harbour line. The airport is not such a big issue. If you have the metro, there is a view that some of the traffic will come down because people will travel by metro but that will be to the airport. The connectivity of this metro will be directly to the airport.Do the studies you have received estimate any percentages of the heavy traffic including double stack containers and multi-axle vehicles (MAVs), supposed to be the future of our port connectivity?We have various estimates on that. We took a long time on deciding that because the two studies showed very different. One showed a very high component of MAVs or heavy traffic, low on cars and the other showed completely reverse of that. We estimate about 90,000 vehicles per day in the year 2031.POLITICS V DEVELOPMENTThe 22 km, Rs 8,800 crore MTHL project on Design, Build, Finance, Operate and Transfer (DBFOT), connecting Nhava on the mainland to Sewree in Mumbai was bidded out for twice could not take off and later it caught in controversy between the ruling Congress and Nationalist Congress Party over the nodal agency for the project. VGF has been made available from the state, and an already pending request for Centre VGF is expected to come through as well.A pre-application conference has been scheduled to be held on 14 December 2011 for intending applicant bidders to raise their queries or make suggestions. The application due date is 7 February 2012.The project involves construction of the longest sea bridge yet in the country.