MUMBAI MAKEOVER - Japan has a yen for Mumbai makeover
 With the cash-on-the- table, no-fuss attitude JBIC promises, the state is considering it as an alternative to the World Bank " " Officials from JBIC got in touch with us and asked us for projects that needed financing. We forwarded them details of three projects, of which they have short listed two Manu Kumar Srivastava, Additional Municipal Commissioner GRAPHIC: HEMAL SHETH " Considering the current exchange rate, it would be better to take the loan from Japan than from the US. D.K. Joshi, " Director & Principal Economist, CRISIL
 Ketaki Ghoge
Mumbai 

THERE'S A new sugar daddy in town, and he's from Japan.
Japan Bank for International Co-opera- tion (JBIC) has signed its first agreement with the government of Maharash tra for a power project. It will loan about Rs 800 crore to the Maharashtra State Electricity Transmission Company (MSETC) for upgradation of transmission lines.

And that's not all. With the cashon-the-table, no-fuss attitude that the bank promises, the state may is considering it as an alternative to the World Bank.
JBIC too has shown interest in some proposed infrastructure projects. It could well be a marriage made in heaven.

The transmission lines project, past of the attempt to modernise the state's power infrastructure, will include the replacement of 180-odd transformers and will hike capacity of the state owned transmission utility.

"JBIC is supporting the project by lending us Rs 800 crore. For the first time, we will seek inter national tender for supply of high-end transformers," said Subrat Ratho, managing di- rector of MSETC.

JBIC has also shown interest in funding Mumbai Urban Transport Project-II, which aims to improve suburban rail services and set up the third corridor of the Mumbai Metro, besides other infrastructure projects in the metropolitan region.

Mumbai is currently undergoing a transformation worth about Rs 43,000 crore, with infrastructure projects for roads, sealinks and railways.

"We have held talks with the JBIC and the bank has expressed interest in fund ing the third corridor of the Metro, certain water supply projects in Mumbai and infrastructure projects," said Metropolitan Commissioner Ratnakar Gaikwad.

About 15 per cent of this will have to come from external funding agen cies like the World Bank and JBIC.
While JBIC gives loans at 0.5 to 0.75 per cent, Word Bank loans cost about 2.75 per cent in inter est. But that will not really bene fit the state, since the Centre through which the loans are fu nelled, and which will eventually repay the loans - charges a flat rate of 9 per cent.
Obviously, as officials anony mously confirmed, the real bene fit is that JBIC is perceived as "less finicky and more flexible"
in terms of its attitude in super vising funded projects.

World Bank had suspended funding to MUTP-I over the rehabilitation of project-affected-persons, prompting the state to hit back with a Government Resolution stating that projects that needed large-scale rehabilitation would not go to the World Bank.

ketaki.ghoge@hindustantimes.com ABOUT THE BANK Japanese Bank for International Cooperation is a financial aid institution created on October 1, 1999. The bank's capital is Japanese; its budget and operations regulated by Japanese law. Its main office is in Tokyo, but it can maintain subsidiary offices overseas. It was set up to promote economic cooperation between Japan and foreign countries by providing funds for foreign projects.
WHY IT IS A HIT IN MAHARASHTRA JBIC has pledged Rs 800 crore for a project that aims to upgrade the state's power transmission lines. It has also expressed an interest in the third corridor of the Mumbai Metro - also the most expensive - and certain water sup WHY THE CENTRE SHOULD BE HAPPY The Japanese Bank offers loans at 0.5 per cent, while the World Bank offers loans at 2.75 per cent interest. While this will not benefit the state, since the Centre funnels the loans and charges a flat interest of 9 per cent, it is good news for Delhi.

ply projects in Mumbai. It has expressed interest in developing infrastructure worth Rs 7,000 crore in all. It is currently studying the Mumbai Sewerage Disposal Project (Parts III, IV and V) worth Rs 2500 crore


Publication : HT; Section : Metro; Pg : 3; Date : 3/10/07
URL : http://epaper.hindustantimes.com/artMailDisp.aspx?article=03_10_2007_003_002&typ=0&pub=264