The Hindu Business Line : World Bank suspends aid to Mumbai project

The World Bank has pulled the plug on Mumbai Urban Transport Project (MUTP). It has temporarily suspended the $150-million funding to the road and resettlement component of the MUTP. The suspension comes into effect from Thursday.

Talking to Business Line, Mr Sumir Lal, spokesperson for the World Bank, said the process of reimbursement has stopped as the Maharashtra Government has shown non-compliance on issues relating resettlement of the project affected people.

"Support has been withdrawn from road and resettlement components, the rail component remains unaffected. Till date only 20 per cent of $150 million has been disbursed," Mr Lal said.

World Bank would continuously review the progress made by the Maharashtra Government over compliance, he added.

A release issued by the World Bank said: "A number of resettlement households are faced with a set of post resettlement problems such as the predictable delivery of services like water and waste removal. Some households face increased commuting times and there have been delays in transferring maintenance funds for upkeep of the building. In addition, a grievance system for those seeking redress is not working properly".

Mr Michael Carter, Country Director (India), World Bank, was quoted in the release as saying, "Suspension is a serious move, reflecting how serious we are about a successful outcome for the issue".

MUTP is an ambitious road and rail renewal plan, which involves the involuntary resettlement of more than 17,000 households and about 2,500 shops and small industrial units. About 14,000 households have already been moved to secure dwellings. These people were among the city's poorest, most living along railways tracks in squalid and dangerous conditions.

Neither Dr T. Chandrashekhar, Metropolitan Commissioner, MMRDA nor senior state government officials were available for comment.

Unconfirmed reports say that the Maharashtra Government is toying with the idea of seeking funds from Japanese banks to complete the project.

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