First Metro line clears funds hurdle
The Mumbai Metropolitan Region Development Authority said on Wednesday that the Central government had last month finally cleared Rs 460 crore for the construction of the Versova-Andheri-Ghatkopar line, after about two years of deliberation, reports Zeeshan Shaikh.india Updated: Mar 05, 2009 00:54 IST
The Mumbai Metropolitan Region Development Authority said on Wednesday that the Central government had last month finally cleared Rs 460 crore for the construction of the Versova-Andheri-Ghatkopar line, after about two years of deliberation.
The amount was sanctioned as Viabilty Gap Funding (VGF), which is given to infrastructure projects built on a Public-Private Partnership model.
The government sanctions such a funding to private players, as infrastructure projects have long gestation periods and are not immediately financially viable on their own.
Mumbai Metro One Pvt Ltd (MMOPL), which is building the first line at a cost of Rs 2,356 crore, had sought a VGF of Rs 650 crore.
“The Centre will provide
a VGF of Rs 460 crore, while the remaining Rs 190 crore will be contributed by MMRDA,” a senior MMRDA official said.
Had the Centre not sanctioned this amount, the MMRDA would have had to shell out this amount from its own kitty, consequently resulting in an inordinate delay in the project’s implementation.
MMRDA officials had held consultations with officials at the Centre and the amount was finally cleared after discussions with the principal secretary at the Prime Minister’s Office.
Although work on the first Metro line started in March 2008, officials of MMRDA and MMOPL were anxious about receipt of the funding.
The Finance ministry had turned down the proposal of providing VGF to the first line on the ground that bids for the first line were awarded before notification of the VGF scheme came into effect.
The VGF for the second line (Charkop-Bandra-Mankhurd) was announced much before the VGF for the first line.