Metro: Chief Secy clarifies 'points'

Metro: Chief Secy clarifies 'points'
Deccan Herald

Countering the details given in the minutes of the second meeting of the Public Investment Board (PIB) regarding the Bangalore Metro, Chief Secretary B K Das has written to the Ministry of Urban Development clarifying that the document “do not reflect the consensual views on certain points”. These “points” include funding, cost escalation, interest during construction and legal and gauge details.

In the minutes of the PIB meeting held on August 5, which was released on August 26, it was stated that the PIB wanted Karnataka to bear the cost escalation and cash loss of the project. Chief Secretary B K Das, in a letter dated August 31, said the contribution of Government of India and Government of Karnataka has not been reflected correctly.

According to the proposed funding option for the Bangalore Metro, the GoI and GoK will contribute 20 per cent and 30 per cent of the cost of the project respectively and both will waive their applicable taxes and duties.

In case GoI does not agree to waive its taxes and duties, the GoI contribution will be increased to 25 per cent of the cost. The revenue deficit in both models was meant to be borne by GoK. “PIB was categorically informed by the officials of Karnataka that given its resource constraints, GoK may be able to fund only 30 per cent of the project cost. Instead, the minutes have shown GoK’s contribution at 35 per cent and that of GoI at only 20 per cent,” Mr Das’s letter noted.

Commenting on the issue of cost escalation, where the minutes suggested that GoI will share the cost escalation only in respect of equipment and not the civil construction cost, Mr Das said: “Being the equal equity holders, the promoters will have to share all the cost escalations equally.”

He also pointed out that “the interest during construction for senior term debts had been arrived at Rs 483 crore whereas the minutes mentions a round figure of Rs 400 crore.”

He said the PIB minutes recommends standard gauge only for the first phase, while it was decided in the meeting to have standard gauge in all the phases. The decision to provide legal coverage under the Mysore Tramways Acts was not “clearly recorded” in the minutes.