Chief Minister Jayalalithaa on Tuesday sought a review of certain provisions in the tripartite Memorandum of Understanding (MoU) entered into between the Centre, State and Chennai Metro Rail Limited as these clauses did not provide for equitable sharing of risks and costs.
The MoU was signed by the then UPA and DMK regimes.
In her memorandum submitted to Prime Minister Narendra Modi, Ms Jayalalithaa pointed out that Clause 12.1 of the MoU requires the State to bear the cost of land and relief and rehabilitation cost, including escalation. The land acquisition cost is provided by the State government as subordinate debt to the Chennai Metro Rail Limited.
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“This skews the capital structure of the company towards higher debt. Further, while the State government has to pay the Central Government Departments for their land, the State Government land is provided free of cost. A fair solution would be to consider land cost as equity contribution of the Central or State Government who are transferring the land,” she said.
Likewise, Clause 11 mandates the State to bear any escalation in project cost and foreign exchange fluctuation beyond the approved project completion period. Also as per Clause 12.16 cash losses have to be borne only by the State. On the other hand, if there is a profit, the Central government would be entitled to a dividend.
Hence, she sought a detailed review of the provisions and suitable revision of the clauses to make it more fair and equitable, reflecting the spirit of joint ownership.
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Merger with MRTS
Ms. Jayalalithaa also sought expeditious approval of the Centre for the integration of the MTRS with the Chennai Metro Rail, which would enable effective synergies between various modes of public transport.
There was also a need to substantially expand the Metro Rail network. The Detailed Project Report for the expansion of the Metro Rail Project along three corridors – North West to South East; West to East; and an orbital corridor at an estimated cost of Rs.44,000 crores had already been approved by the Government of Tamil Nadu and would be ready shortly.
Ms Jayalalithaa urged the Prime Minister to instruct the Ministry of Urban Development and Finance to support the proposed Phase II of the Chennai Metro Rail project by granting early clearances. She also disapproved of the Railways retaining “surface rights” for its land, which have been taken on long lease by the CMRL by paying 99 per cent of the market value for 35 years. She felt if the Railways needed “surface rights” it should have charged only nominal/ token lease rent for use of the land for underground work. Alternatively, she wanted the Railways to grant full rights to the CMRL by transferring the land value at full market value as the Central Government’s equity contribution to the project.
Wants certain clauses revised to make
the project fair
and equitable
to the State