Kochi Metro Rail has achieved a rare feat for a massive project of its scale when it managed to seal the entire loan component following the signing of the Credit Facility Agreement for a long-term loan of Euro 180 million (Rs.1,500 crore).

The agreement, which is in a sense a guarantee for the project, was signed between the Union government and the French Development Agency AFD at Kalpavriksha Hall of the Department of Economic Affairs in New Delhi on Friday.

Rajesh Khullar, the Joint Secretary at Department of Economic Affairs under the Union Ministry of Finance, and Anne Paugam, the Chief Executive Officer of the French Development Agency were the signatories. François Richier, French Ambassador to India, was a co-signatory with Kochi Metro Rail Limited (KMRL) managing director Elias George also being present.

Kochi Metro has pegged its loan component at Rs. 2,170 crore. With the combined aid of Rs. 1,500 crore from AFD and Rs. 1,170 crore from the Canara Bank, the project has, in fact, overshot its loan requirements. Both the loans had already received the approval of the board of directors of KMRL. The remaining of the Rs. 5,181 crore will be raised by the State and Centre and through subordinate debt.

The clearance of the entire loan requirement well in advance would definitely help KMRL go full steam with the project. More importantly, it is expected to infuse immense confidence in prospective vendors and consultants to associate with the project without any apprehension. It is likely to smoothen the move to go in for a consultant to ensure quality and safety of the project and a transaction advisor for the proposed Metro City at Kakkanad.

Close on the heels of the signing of the Credit Facility Agreement with the Union government, the AFD delegates will be in the city on Saturday to wrap up the loan formalities. A high-level meeting held in the presence of the Chief Minister at Thiruvananthapuram on Thursday decided to retender the bid for Metro coaches. It had been decided to amend the tender guidelines to ensure the participation of more companies.

The rolling stock director for KMRL will recommend the amendments after a detailed study. The Delhi Metro Rail Corporation (DMRC) will be floating tenders based on these guidelines. The meeting entrusted Principal Advisor to DMRC E. Sreedharan with taking appropriate decisions in the event of disagreements over the issue.

Only one firm had responded to the tender floated initially. The tender committee and the director board of KMRL had made it clear that a tender with sole bidder cannot be accepted.

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