Centre’s proposed policy shift in funding may hit Metro
LUCKNOW: With the union urban development ministry seriously considering a policy shift to reduce the central government’s share in future metro rail projects, Lucknow Metro Rail may have to ultimately rely on its own resources to raise funds for the project.
The Narendra Modi government has so far pledged ` 50 crore against a total proposed financial assistance of ` 1,300 crore by way of centre’s equity for phase IA of the Lucknow Metro Rail project. Metro rail projects are usually a joint venture between the state and the centre and implemented on a 50:50 equity basis.
With more and more cities in the country opting for this modern high speed public transport, this 50% cost sharing is proving to be a big drain on MoUD coffers, restricting its capability to allocate funds for other development projects. “The issue was discussed at a recent meeting in New Delhi to evaluate Lucknow metro project by Public Investment Bureau (PIB),” revealed a source requesting anonymity.
“Besides Ahmedabad and Lucknow, they (MoUD) officials told us that they had as many as six other ongoing metro rail projects in the country with centre’s share of over ` 40,000 crore. Against this, the central government released a little over ` 5,000 crore under this head to the ministry for 2013-14 fiscal,” he said. And the situation is likely to worsen in future with the existing MoUD guidelines agreeing to bear half the cost of DPRs for metro rail projects for all cities with a population of over two million.
Keeping in mind the increasing liability of the ministry, he said, both union finance ministry and PIB experts were of the view that the existing 50% equity of the MoUD in metro rail ventures should be capped at 10%. He said though the PIB appraisal meeting was very positive, a final call on funding would be taken by the union cabinet when it took up the proposal.
With a construction cost of R 300 crore per kilometre, the cost of the 22.87-kilometre North-South corridor of Lucknow Metro Rail project from CCS airport to Munshi Pulia has been pegged at ` 6,880 crore. “Since we largely have overhead tracks on this corridor, the MoUD experts have suggested that we raise funds from property development by giving purchasable FAR and other incentives along the route,” said a Lucknow Metro Rail Corporation (LMRC) official.
As of now, he said, they had enough funds to commence service on an eight-kilometre priority section of the N-S corridor (from CCS Airport to Alambagh) by December 2016, as announced by chief minister Akhilesh Yadav. LMRC’s financial outlay for the next two years is a little over ` 2,000 crore. Of this, it intends to get a financial assistance of ` 350 crore from the centre. “We have already issued work tender for ` 541 crore of civil work. A major expenditure would be incurred on procuring the rolling stocks (read coaches) for which we have already received loan offers from several foreign institutional lenders and banks,” he said.
IN A NUT SHELL
The Narendra Modi government has so far pledged ` 50 crore against a total proposed financial assistance of ` 1,300 crore by way of centre’s equity for phase IA of the Lucknow Metro Rail project. Metro rail projects are usually a joint venture between the state and the centre and implemented on a 50:50 equity basis. With more and more cities in the country opting for this modern high speed public transport, this 50% cost sharing is proving to be a big drain on MoUD coffers, restricting its capability to allocate funds for other development projects. “The issue was discussed at a recent meeting in New Delhi to evaluate Lucknow metro project by Public Investment Bureau (PIB),” revealed a source requesting anonymity.
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