Delhi Metro budget goes off-track for phase 3
The Delhi Metro Rail Corporation (DMRC) is looking at a project cost overrun for the first time since its inception.delhi Updated: Nov 28, 2013 02:48 IST
The Delhi Metro Rail Corporation (DMRC) is looking at a project cost overrun for the first time since its inception. Not surprisingly, one of the reasons cited is inflation. The 140-km Phase 3 project is already running behind schedule and if the DMRC fails to meet its March 2016 deadline, the cost may escalate further, say sources. This may further impact funding.
The budgeted cost of Phase 3 of the Delhi Metro was approximately Rs. 35,000 crore. It has now increased by about 10%. “This is due to the addition of some corridors in the original plan and a steep rise in the cost of raw materials,” said Anuj Dayal, chief spokesperson, DMRC.
Japan International Cooperation Agency (JICA) is one of the biggest financiers of the Delhi Metro and the cost overrun will impact its disbursement of funds.
According to DMRC, due to the project cost escalation, the funding by JICA would need to increase by at least 5%-6%. “Initially, the loan from JICA was about `18,565 crore, which has increased to about `20,000 crore,” a DMRC official said.
JICA representative Hiroshi Yoshida told HT that the agency has agreed to bear the “affordable” additional burden. “(But) if in future the project cost further increases we may have to look at the viability of it.”
Yoshida said JICA would soon release the second tranche of the loan to DMRC.
In March 2012, JICA signed an MoU with India to release the first tranche of Rs. 7,922 crore. The balance of the soft loan will be disbursed in two equal parts.
“In all previous phases, DMRC was able to complete construction within the sanctioned cost. But despite our attempts to construct Phase 3 corridors under tight budgetary pressure, the project cost has increased due to unavoidable reasons,” said DMRC chief Mangu Singh.
The Phase 3 project was initially meant to cover a 104km stretch. But various amendments to the original plan extended the project to 140 km. Part of the increase in the cost can be attributed to the fact that the Janakpuri West-Palam section, proposed to be an elevated corridor, has been taken underground. Underground lines cost much more than elevated lines.