In what could turn out to be a major embarrassment for India, the government might lose out on Japanese funding for the Rs. 4,874 crore Kolkata metro’s 14.67 km East-West corridor plan, connecting Salt Lake to Howrah.
The Japan International Cooperation Agency (JICA) – which has pledged soft loan worth Rs. 2,253 crore -- has threatened to pull out of the project citing inordinate delay on the part of implementing agencies to claim funds sanctioned by it.
The JICA has set a June 30 deadline for the government to resolve funding issues, failing which it will withdraw. Started in 2008, the project is just 30% complete.
“JICA had written to us last month threatening to pull out. Not only are they miffed at the delay in claiming the loan but are unhappy over the proposed change in alignment of the project,” HK Sharma, managing director, Kolkata Metro Rail Corporation Limited told HT.
The project seems to have become a casualty of the political slugfest between the Congress-led UPA-II and Trinamool Congress (TMC). Earlier, the urban development ministry and state government had a 50:50 stake in the project.
Last August under pressure from TMC, a key UPA ally at that time — and whose government in West Bengal was staring at acute financial stress — 74% stake was transferred to the railway ministry. The UD ministry retained 26%. TMC leader Mukul Roy was the rail minister but with TMC’s exit from UPA-II, railways turned cold to the project.
It only allocated Rs. 100 crore for the project this fiscal as against a requirement of Rs. 1,000 crore. It has also not kept any provision for claiming JICA loans.
Loans from JICA can be disbursed only if the railways make a specific provision in its annual budget. No such provisions have been made in 2013-14 budget, effectively blocking access to the funds critical for the project.
With JICA’s exit looming large, the Centre held a high-level meeting comprising officials from Planning Commission, finance, UD and railways ministry on May 10 to resolve the crisis. But the meeting remained inconclusive.