BMRTL open to pvt players running Metro

BMRTL open to pvt players running Metro
The Times of India

Bangalore: Despite so much dust and heat being raised on the Bangalore Metro Rail project, Bangalore Mass Rapid Transit Limited (BMRTL) has said it is confident of obtaining the necessary Public Investment Board (PIB) approval by Friday. BMRTL managing director K.N. Shrivastava explains why their proposal will go through despite objections raised by some in the Revenue department of the Union Finance Ministry. Excerpts:

PIB meeting has to clear the Metro Rail project. Why has it not taken place yet?
The PIB meeting is expected any day. We are confident to get the PIB approval. After that, it will go to the Cabinet Committee on Economic Affairs (CCEA) for clearance with due recommendations of PIB. After the CCEA approval, Government of India and Ministry of Urban Development will issue a formal order approving the project. The next step will be signing of MoU between promoters Government of Karnataka and Government of India, which should basically spell out duties and responsibilities apart from financial and other support. We have to get the loan portion firmed up.

When will you shortlist the civil contractors?
We have already received tenders for construction of elevated portion of the Metro. A total of 25 bids, including 14 from foreign companies, have been received. We have shortlisted 12. I have not called for financial bids since the Centre has to approve the project. Two weeks after the Centre’s approval of the proposal, we will call for the financial bids. By August, we will be able to start the project. The next crucial thing is appointment of general consultants. Global expressions of interest were invited. A total of eight consortiums have submitted their bids. We will call them for financial bids after evaluating. By September-end, the general consultants should be in place.

What about the cess collected by the state government? It is said that only Rs 150 crore has been transferred.
The cess collected by the government till 2004-05 is Rs 700 crore. Out of this, the government has transferred Rs 300 crore ‘equivalent’, which includes defence lands. A balance of Rs 400 crore needs to be transferred, but the government has used it for paying off some other loans. This money has to come to BMRTL and it cannot go anywhere.
Why is the BMRTL so insistent on government funding when the new policy is to disinvest?
Metro Rail is a public utility. It is not in the business of earning profit, but to serve people at an affordable rate. Since this is a capital-intensive project, it has to be supported by government. The Centre has decided that it will experiment with Bangalore Metro Rail project on an equity participation basis and the Mumbai Metro on a BOOT basis to draw future policy.

The World Bank has in the past refused to fund Railways stating that it will come forward only if fares are increased. Won’t the Metro Rail also face such problems if it is government-controlled?
In case of any public utility, there has to be a mechanism to fix the user charges. There will have to be a regulatory mechanism for fare fixation of any transportation system. The government is duty bound to make good deficit. It is a political decision. This claim of government contribution of just 10 per cent is not correct. Private players seek so many concessions that ultimately the government will have to invest over 90 per cent. However, BMRTL is open to having private players operate the system after the Metro Rail is built.