In a major push to one of Maharashtra’s most ambitious infrastructure projects, the state government has approved a ₹22,250 crore state guarantee for loans to be raised by the Maharashtra State Road Development Corporation (MSRDC) to fund land acquisition for the Virar–Alibaug Multi-Modal Corridor (VAMMC).
The Finance Department issued a fresh government resolution (GR) cancelling its earlier June 12, 2025 decision and replacing it with a revised approval based on updated Cabinet directives.
What the New Approval Means
The state guarantee allows MSRDC to borrow ₹22,250 crore from HUDCO, the financial institution funding key infrastructure projects across India. This borrowing will be exclusively used for acquiring land for the VAMMC corridor.
The approval was granted after the Cabinet validated the draft Guarantee Agreement between MSRDC and HUDCO, ensuring the loan terms comply with the state’s financial rules.
Strict Conditions Imposed by the Finance Department
The state guarantee comes with 17 mandatory conditions, signalling strict monitoring of the loan’s use and repayment. Key conditions include:
1. Loan validity and cap
- The loan must be raised within 12 months from the date of GR.
- The guarantee applies strictly to ₹22,250 crore only—no additional borrowing allowed.
2. Repayment responsibility
- MSRDC will be the principal debtor.
- The state government will not be liable for penalties, delayed payment interest, or additional charges.
3. Escrow Account Mandate
An independent Escrow Account must be opened to:
- Receive the loan,
- Channel project revenues,
- Ensure transparent repayment to HUDCO.
4. Default Protocol
In case MSRDC delays repayment:
- HUDCO must notify the government within 90 days.
- MSRDC must first auction mortgaged properties or assets to clear dues.
- HUDCO cannot invoke the state guarantee without exhausting all recovery efforts.
5. Usage Restriction
The loan must be used exclusively for the VAMMC land acquisition purpose, with no diversion.
Guarantee Fee Structure
- MSRDC must pay a 0.50% per annum guarantee fee.
- Payments are due twice every year—on April 1 and October 1.
- Late payments attract:
- 16% interest for the first 3 months, and
- 24% thereafter.
VAMMC: Maharashtra’s Transformational Transport Spine
Once completed, the Virar–Alibaug Multi-Modal Corridor will become:
- A 126-km long express connectivity spine linking MMR’s western, central, and southern ends.
- A connector integrating road, rail, metro, freight, and passenger transport.
- A project expected to reduce congestion, unlock new townships, and catalyse economic activity across 6+ growth zones.
Land acquisition is the project’s most extensive and expensive phase—making this ₹22,250 crore guarantee a critical catalyst.
Government’s Revised Resolution Replaces Earlier Policy
The new resolution:
- Cancels the June 12, 2025 GR,
- Approves a revised and Cabinet-backed arrangement,
- Grants signing powers to designated officials in the PWD and Finance Department to execute the updated loan agreements.
