The ambitious Chandigarh Metro Rail project is running behind schedule by more than a year as the three stakeholders -Chandigarh, Punjab and Haryana - have so far failed to form special purpose vehicle (SPV) for its execution.
The work on first corridor covering a distance of 12.49 km was expected to begin from April 2013 and get operational by 2018.
Following the directions of the ministry of urban development (MoUD), the stakeholders started working on formulation of SPV in June 2013, but so far have failed to make any headway.
The SPV is a legal entity established for the implementation of specific projects and is used to isolate the governing authority or stakeholders from operational and financial risk. The SPV can be registered under the Companies Act as a public sector body either wholly owned by the central government or with equity participation from the state governments as well.
Besides, nodal officers for the project are also to be nominated and a core team has to be formed. In December last year, the Chandigarh administration had written to Punjab and Haryana on the issue.
UT adviser KK Sharma said the process got delayed due to elections and they would take up the issue with the states of Punjab and Haryana for expediting the process for the formation of SPV. PROJECT COST TO ESCALATE
The delay in execution of the project will result in cost escalation. According to the detailed project report (DPR), total estimated cost of first corridor as on January 2012 was worked out at ` 3,832 crore. According to sources, the cost of project will escalate manifold as a considerable chunk of route in Chandigarh will be underground.
The total length of metro project covering Chandigarh, Panchkula and SAS Nagar is 37.57km with estimated cost of ` 10,900 crore, which will be shared among the Centre, Chandigarh administration and the governments of Punjab and Haryana. All three stakeholders have agreed for a stake of 25% in the project, while remaining 25% will be financed by the Centre.
Chandigarh is planning to take loan from the Japan Inter national Cooperation Agency, which also provided loan for the Delhi metro project. Earlier, Haryana had expressed its intention of becoming partner with Chandigarh in the project. The Punjab cabinet has already given approval to link SAS Nagar with Chandigarh.