Metro a non-starter: UT sticks to no-PPP stand on ‘unviable’ project
A dead-end before hitting the ground- that appears to be the fate of the Chandigarh metro rail project. Being touted for years as the game-changer for the tricity’s public transport, the project remains stuck at the first question: How to fund it? And even after the latest meeting last week between the UT, Punjab, Haryana and the Centre, there is no consensus.chandigarh Updated: Apr 04, 2015 12:35 IST
A dead-end before hitting the ground- that appears to be the fate of the Chandigarh metro rail project. Being touted for years as the game-changer for the tricity’s public transport, the project remains stuck at the first question: How to fund it? And even after the latest meeting last week between the UT, Punjab, Haryana and the Centre, there is no consensus.
While the UT administration is adamant that the project, now estimated to be worth around Rs 15,000 crore, must be carried out by the four governments, with 25% stake each, Punjab and Haryana want the public private partnership (PPP) mode due to the high cost. In the latest, after a meeting last Friday on regional issues, including the metro project, the administration is set to write to the Centre again that it does not want the PPP mode.
What makes it stickier is that the wider view within the UT administration-shared by local BJP MP Kirron Kher -is that the project is “commercially unviable”, given the traffic volume and the varying stakes and financial health of the stakeholders, sources said. So far, thus, not even a memorandum of understanding (MoU) has been signed to form a special project vehicle (SPV) for it.
When asked about the no-PPP stand of the administration on the metro, finance secretary Sarvjit Singh said, “We will be conveying our view in writing soon the Centre.” The communication could be sent as early as the next working day, that is, Monday. On viability, he said indeed the cost is significant and that should be studied.
The first phase of construction was to start exactly two years ago, in April 2013. The cost of the 37-km project was estimated at Rs 10,900 crore. It is now pegged at Rs 15,000 crore, “particularly because most of the route is to be underground; and that costs Rs 300-350 crore per km to construct alone,” said a top official refusing to be named.
The initial MoU draft circulated three years ago mooted government funding, while a revised draft in 2013 put the PPP option. Last year, the then UT administrator Shivraj Patil simply rejected the much-debated PPP option. The troubles and outright failures of major PPP projects, including the Delhi airport metro and the Mumabi metro, are cited as examples. Late last year and early this year, however, both Haryana and Punjab sent amendments for the MoU and backed PPP.
Chandigarh has a vehicular population of around 11 lakh, for a population of roughly 12 lakh as per the 2011 census. Plus, there is the rush from adjoining areas as a Greater Chandigarh has taken shape over the years. Metro rail is seen as a modern option to ease the congestion, but experts have repeatedly pointed out how the existing public transport system is underused.
On paper, the metro is to start in 2018. Even if the original schedule and cost were taken into account, the DPR said it won’t be commercially viable till 2051.
Besides, loans from global agencies, business development at the stations, cess on fuel and levies on new vehicles are listed as possible ways of meeting the cost.