KOLKATA (Metro Rail News): Railway Board has cleared East-West Metro’s revised cost of Rs 8575 crore. The initial project cost calculated 11 years ago was Rs 4,874 crore. The much-awaited nod will allow Japan International Cooperation Agency (Jica) to finally start disbursing the rest of the loan amount.
Jica is the principal funding agency for the project and is lending 55% of the total cost. The rest will be borne by the Centre. It had held back the third tranche of loan because the revised cost was not approved by the Railways Board.
Officials said there are two small steps after this following which the Jica funds will start flowing. Railway Minister Piyush Goyal will put his signature on the Railway Board approval and send it for the Union Cabinet’s clearance. “But the Railway Board’s approval is certainly the most important milestone for the revised cost,” said an official.
The nod came from an extended Railway Board that included members from the Union finance ministry, Niti Aayog and the ministry of statistics and program implementation. Jica’s contribution to the East-West Metro project will now be revised to Rs 4,158 crore. Earlier its share was Rs 2,253 crore of the Rs 4,874 crore estimated in 2008.
The cost was revised to Rs 8,575 crore in December 2015, but it has taken four years for Railway Board to approve the re-evaluated amount. The cost was revised because of escalations caused by several hurdles the project has gone through, including a route realignment, which is the biggest reason for the doubling of the project cost.
Kolkata Metro Rail Corporation (KMRC), the implementing agency, also cited an increase in wages and prices of steel and iron as the other factors. Interestingly, the cost revision has been approved two months after the project was hit by the biggest setback so far — the Bowbazar tunneling disaster that led to the collapse of several buildings and subsequent delay in meeting the deadline.
The latest setback will lead to more cost escalation, officials said. On the other hand, East-West Metro’s first phase covering 5km elevated stretch between Sector V and Salt Lake Stadium is about to be unveiled.
In 2008, KMRC had pegged that Rs 4,785 crore would be required to build the Metro rail system between Howrah Maidan and Salt Lake Sector V, including an underwater section, as part of “Kolkata East-West Metro Project (III)”. In December 2015, KMRC had sent a revised estimate of Rs 8,996 crore to the Union Cabinet.
The Cabinet set up a committee to review the cost. It recommended deductions and returned the file in 2017. KMRC officials went back to the drawing broad and reached a figure of Rs 8,575crore with a June 2021 deadline. Since then, the file has been passed from the finance ministry to the Cabinet and then to Niti Aayog and several other government departments.