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REL agrees for lower returns in Mumbai Metro

Decks have been cleared for the Phase-I of the ambitious Mumbai Metro Rail project with ADAG's REL-led consortium.

india Updated: May 12, 2006 03:33 IST

Decks have been cleared for the Phase-I of the ambitious Mumbai Metro Rail project with ADAG's Reliance Energy Limited (REL)-led consortium reducing its returns from the project by nearly 50 per cent to Rs 650 crore.

As desired by the Maharashtra government Reliance Energy has submitted fresh estimates lowering the difference between actual expenditure on the project and expected returns (Viability Gap Funding) by nearly 50 per cent to Rs 650 crore from earlier Rs 1250 crore.

The phase-I of the Mumbai metro project is 12-km long between Versova-Ghatkopar corridor.

The REL, ConnexSA, France and MTR Corporation Hong Kong in a letter to Mumbai Metropolitan Region Development Authority (MMRDA) yesterday, had stated that they have slashed their viability gap funding (VGF) from the earlier Rs 1,250 crore to Rs 650 crore, a Reliance official confirmed.

This followed more than three months of discussion with MMRDA.

"We have received the letter from Reliance yesterday and the VGF falls within the MMRDA estimates," an MMRDA official said, adding that after necessary approvals the contract would be awarded.

The project is expected to start in October and the phase I would be complete by 2010-11.

"Before October, the MMRDA will complete the widening of the complete route of the Metro Rail to expedite the work," the official said.

On the next two phases of the project, he said work on all three phases of Metro are expected to start in the current year itself.