Kerala opposes PPP mode for Light Metro

January 29, 2015 12:00 am | Updated 09:24 am IST - THIRUVANANTHAPURAM:

Kerala has opposed the Public Private Partnership (PPP) mode mooted by the Centre, with Viability Gap Funding (VGF), for the Rs.6,728-crore Light Metro project for Thiruvananthapuram and Kozhikode.

“All previous attempts to execute Metros through the PPP route had run into problems,” Chief Minister Oommen Chandy has told Union Minister for Urban Development M. Venkaiah Naidu.

Metro Line I and II of Mumbai and airport lines of Delhi and Hyderabad are ‘classic examples of delays, cost overruns and concessionaire abandoning the project,’ he has said.

As Metros are capital intensive and social projects, fares have to be kept low.

Unviable

The Chief Minister has pointed out that ‘no Metro will be financially viable for private investment even with generous VGF.’

The VGF provided is normally 30 per cent of the estimated cost.

Official sources told The Hindu that the State had taken the stance in consultation with Planning Board Member E. Sreedharan and that PPP mode would not be viable even if the VGF went up to 60 per cent.

“The Planning Commission wanted to try this on Kochi Metro and we lost six years with the project cost getting doubled. Finally, it was taken up as a fully funded government project. No useful purpose will be served in exploring the PPP route,” Mr. Chandy said.

Instead, the State has demanded taking up the Light Metro as a joint venture between the Union and State governments on the Delhi Metro pattern at a cost of Rs.160 crore a km. The State has demanded that Rs.200 crore be earmarked in the ensuing Union Budget as token provision for the project to ensure that it began without delay.

Mobility plan soon

The Chief Minister has also informed Mr. Naidu that the Comprehensive Mobility Plan being prepared for the two cities is ‘almost over’ and will be submitted to the ministry soon.

The State has revealed the need for rail-based mass transit system and Light Metro has been found to be ‘economical and appropriate.’

DPR accepted

The State has already told the Union Minister that it has accepted the DPR prepared by the Delhi Metro Rail Corporation for the 35.12-km light metro.

The Centre’s contribution for Thiruvananthapuram will be Rs.805 crore and for Kozhikode, Rs.473 crore, for five years if the cost is shared by the State and Union governments.

Bid to execute Metros via PPP has failed: CM

Decision follows consultations with E. Sreedharan

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