Will Metro Rail project receive Rs. 1,800-crore loan from JBIC?

Will Metro Rail project receive Rs. 1,800-crore loan from JBIC?

The Hindu

The deadline for signing loan agreement expired on Tuesday

# The agreement was to have been signed by the Indian and Japanese governments
# It could have been signed only if the Cabinet Committee on Economic Affairs had approved the project
# The next meeting of the committee can take place only on March 30
# It is not clear whether the JBIC will extend the deadline

BANGALORE: Has the Rs. 6,300-crore Metro Rail missed the JBIC (Japan Bank for International Cooperation) bus? This is the question being asked by all those who have been keenly watching the developments relating to the mega project for Bangalore city.

Tuesday (March 28) was the deadline set by the JBIC for signing the Rs. 1,800-crore loan agreement between the Union Government and the Government of Japan.

For the agreement to be signed, the Cabinet Committee on Economic Affairs (CCEA) should have approved the project. That has not happened. The CCEA, which meets on Thursdays, did not approve it even by March 23.

The next meeting can take place only on March 30, past the JBIC deadline.

V. Madhu, Managing Director of Bangalore Metro Rail Corporation Ltd. (BMRCL), has gone on record saying that the Union Government is seized of the matter and that he will make efforts to secure the loan. He has said that he will take it up with the authorities concerned during his visit to New Delhi.

Metro was one of the 20 projects short-listed for JBIC loan. JBIC representatives had visited the city for an assessment of the project before short-listing it. Hence, it is argued that the bank has several other avenues to invest and is not particularly keen on investing only in the Metro.

But sources point out that the bank's representatives have visited the city at least four times and have found it creditworthy. "They are likely to give the loan," the sources said.

The sources said the loan is crucial for the Metro because it is the cheapest.

While the bank charged an interest of 1.3 per cent per annum, loan for the Metro could have been obtained at 3.6 per cent.

JBIC gives loans at low rates for such projects in developing countries in its effort to promote international peace and security. JBIC has said: "Japan is dependent on foreign countries for resources, energy, foods, etc. Stability of an international community and its sustained growth are thus important for the nation to ensure its own security and prosperity."

India has taken a loan from JBIC for rebuilding the areas affected by the tsunami.