No private players to build Metro lines, says Maharashtra chief minister
The central government will aid metro rail projects only if they have private participation, under the new policyUpdated: Sep 10, 2017 01:49 IST
The Mumbai Metropolitan Region Development Authority (MMRDA) will not seek central aid for the remaining Metro rail projects in the city.
With Metro lines worth over Rs50,000 crore in the pipeline, chief minister Devendra Fadnavis, who heads the MMRDA, said it will not switch to a public-private partnership (PPP) model after a new policy on Metro rail projects was cleared by the Centre last month.
The central government will aid metro rail projects only if they have private participation, under the new policy.
The MMRDA — the nodal agency for the Metro projects — will raise funds through the domestic market and via bonds through the Life Insurance Corporation (LIC) of India.
“The government will continue to execute Metro projects on an EPC (engineering, procurement, and construction) model,” Fadnavis told HT when asked if the government plans to switch implementation models now that a new policy, which would secure central aid, is in place.
A senior MMRDA official said they would continue to raise funds on its own to implement the remaining 115km of Metro lines.
“As of now, there is no plan of having PPP in the construction part of it. If at all, one can think of it [PPP] at the time of operation and maintenance. On that too we have not taken a call yet,” said UPS Madan, metropolitan commissioner, MMRDA.
In the past, the MMRDA through Maharashtra government has sought aid from the Centre for its Metro projects, but was told to raise funds on its own.
The Colaba-Bandra-SEEPZ Metro-3 line is a joint venture between Centre and Maharashtra.
Another senior official said that the MMRDA, which is already executing two metro lines worth Rs12,618 crore in Mumbai, will continue to fund construction and borrow from multilateral financial institutions for the remaining six corridors that are planned.
“But since the state government is not willing to stand as guarantor for loans (from multilateral agencies), we will have to raise money through domestic market and bonds,” the official said.
With around Rs17,000 crore in its kitty, it would be challenging for MMRDA to fund construction of the remaining lines. Inking deals with multilateral agencies for coaches and signalling will be a challenge as well, as the state government has decided not to back the loans because it would add additional burden on it.
Apart from that, the state government and MMRDA has had a bitter experience with the PPP model in the implementation of the Versova-Andheri-Ghatkopar Metro line.
“Though seeking central aid and going on PPP seems like a simpler option, there could be complications during operations. There is already one bad experience with Metro-1. There are three Metro projects being adopted by the government. Now if we go back to PPP, there could be operational and integration issues,” said a senior bureaucrat, who did not wish to be named.
First Published: Sep 10, 2017 01:49 IST