Metro crosses another hurdle

Metro crosses another hurdle
Deccan Herald

In a decision that could lead to faster approval of the Bangalore Metro project by the Centre, the Union Cabinet on Wednesday accepted the recommendation of the Group of Ministers (GoM) that operation and maintenance of metro rail systems and the choice of gauge should be the domain of state governments.

In a decision that could lead to faster approval of the Bangalore Metro project by the Centre, the Union Cabinet on Wednesday accepted the recommendation of the Group of Ministers (GoM) that operation and maintenance of metro rail systems and the choice of gauge should be the domain of state governments.

The GoM, which was set up to recommend measures to facilitate faster implementation of metro rail projects in the country, had also asked the Cabinet Committee on Economic Affairs (CCEA) to take up the Bangalore metro project for final clearance, and following Wednesday’s Cabinet decision, the CCEA is expected to take it up at an early date.

The cabinet meeting with Prime Minister Manmohan Singh in the chair, approved the proposal of the GoM that the operation and maintenance of metro rail systems within a municipal area would be legislated upon by the state governments concerned.

The cabinet also approved that the choice of the gauge for the metro rail systems would be left to the state governments concerned, Defence Minister Pranab Mukherjee said after the meeting. The institution of Commissioner of Railway Safety would be strengthened so as to enable it to issue safety certification to such systems.

Transport policy

In another important decision, the cabinet approved the proposed National Urban Transport Policy that aims at ensuring “safe, affordable, quick, comfortable and sustainable access” for city residents across the country.

The policy aims at encouraging integrated land use and transport planning in all the cities to facilitate reduction of travel distances, improved access of business to markets, greater use of public transport and the establishment of quality focused multi-modal public transport systems, Mr Mukherjee said.

CCEA nod

Meanwhile, the CCEA gave its approval to the Bangalore-based ICICI Venture Funds Managements Company Ltd’s proposal to raise $750 million, which is up to 75 per cent of the corpus of the fund, by way of issue of unit capital on a repatriable basis from the NRIs, PIOs and foreign investors. The proceeds of the investments would be utilised only in sectors permitted by the FDI policy and also observe sectoral caps, Mr Mukherjee said.

UNANSWERED QUESTIONS

The missing tracks

From B S Arun

DH News Service

New Delhi:

Although the Union cabinet has given approval to the recommendations made by the Group of Ministers (GoM), there is still a veil of uncertainty over certain aspects specific to the Bangalore Metro.

These issues relate purely to financial aspects, some of which were dealt with and approved by the Public Investment Board (PIB) in its last meeting held in August 2005.

They include the Central contribution to the project as well as the tax concessions available both from the Centre and the State. Some of these issues were agreed upon after over two years of discussions at the pre-PIB and PIB.

PIB, however, left open the issue of tax concession from the Centre which is likely to be taken up by the CCEA. In the August meeting, the PIB gave the green signal to some of the financial matters minus the assurance that the Centre will give tax exemption. The Karnataka government sought tax exemptions to the tune of Rs 492 crore. The State wants the Centre to bear the cost as has been done for Delhi Metro but the Finance Ministry opposed the proposal.

The PIB gave clearance to aspects such as cost and financing of the project and how Bangalore Metro could maximise ridership.

The previous managing director Bangalore Metro K N Srivatsava had informed the PIB that the UTI Bank, the lead bank which has made financial appraisal for the project, would raise Rs 3,200 crore to fund the Metro.

As for guarantees, there is no government guarantee but there will, however, be escrow cover. The bankers have agreed to it.

As for tax exemption from the state, the Karnataka government has agreed for exclusion amounting to Rs 177 crore. It was pointed out that if the exemption was not given, the project would not be viable.

As for clarifications regarding the steps it would take to increase the ridership in the Metro, measures like not operating the city transport buses on Metro lines, public parking facility etc would be taken up.

Regarding cost escalation, Bangalore Metro has clarified that about 10 per cent of escalation charges had been provided for in the project amount.