Metro likely to come under NURM

Metro likely to come under NURM
Deccan Herald

The Bangalore Metro project is likely to be accommodated under the proposed National Urban Renewal Mission (NURM) once the Planning Commission, which has strongly backed the venture, takes a decision in this regard.

The panel has circulated an internal note seeking ways to bring the Metro project under NURM. If the Commission indeed decides on this score, then it will come as a big boost to metros, not only of Bangalore, but also of similar projects in other cities.

A senior official of the Commission told Deccan Herald that the panel would discuss the issue and take a decision shortly.

When his attention was drawn to a news item in these columns that the Rs 6000-crore Bangalore Metro was not part of the projects the state government may recommend under NURM, the official pointed out: “It is true that Metro projects are, under the proposed guidelines, not part of NURM. However, keeping the Bangalore project in mind, we have circulated a note how best we can fund the IT city’s infrastructure project.”

According to the official, the picture will be clear once the Commission decides the complex question of whether the funding should be treated as equity or grant.

“Funding norm under Rs 5500-crore NURM for civic amenities will most probably be as grant, but we may have to fund the Bangalore Metro only as equity as the Government of India is an equal partner in the project,” he added.

The Commission sources pointed out that the Bangalore venture needed to be helped, as projects in other cities such as Mumbai, which will have private sector participation, may get funding under the recently passed Viability Gap Funding programme.

They added: “Plan panel’s deputy chairman (M S Ahluwalia) is all for the Bangalore Metro and senior officials are keen that the project should be given all co-operation from our side. We want it to get going at the earliest. We all hope the political opposition to it will soon end and that it will be on the right track.”

If the Commission wants to fund Metro under NURM, then it will have to convince the finance ministry which has taken a stand against the move. According to the ministry, Metro projects have to go through a different route such as approvals by pre-Public Investment Board, the PIB and the Cabinet Committee on Economic Affairs, whereas NURM can be passed by a committee under urban development ministry.

Government funding

As for the capital funding of the project, the state government is likely to assist to the tune of Rs 1807 crore, the Centre Rs 1447 crore, banks Rs 700 crore and the remaining amount to be raised from agencies such as Japanese Bank for International Co-operation.

The PIB, while recommending the project to the CCEA, had asked the state government to clarify on certain aspects like tax exemptions, cost, financing.

As for tax exemption, the State Government has agreed for exclusion amounting to Rs 177 crore, while the Bangalore Mass Rapid Transit Limited (BMRTL) wants exemption of Rs 492 crore from the Union Government. The Centre, however, may not agree to this amount.

The BMRTL wanted the first train to run from October 2008 and all works under the first phase covering a stretch of 33 km completed in five years, but it looks unlikely as the project is mired in political controversy and the Union Government delaying its approval.