Kerala Monorail: Kerala Monorail Corporation board discusses financing of Light Metro

Light Metro Rail
Light Metro Rail System

Thiruvananthapuram: Kerala Monorail Corporation Limited (KMCL) has sought the Delhi Metro Rail Corporation’s (DMRC) remarks on the State Planning Board’s observations on the Public Private Partnership (PPP) mode mooted for the Rs.6,728-crore Light Metro for Thiruvananthapuram and Kozhikode.

The board of directors meet to discuss the financial mode to be chosen for the proposed Light Metro Rail project for ThiruvananthapLuram and Kozhikode saw both Planning Board and Delhi Metro Rail Corporation (DMRC) coming up with different options. The Planning Board suggestion is to go for the PPP model to carry out the project, pointing to the financial constraints of the state government.

Official sources told that Mr. Sreedharan pointed out the failures of the three metro projects taken up in the PPP mode in the country, problems in handing over government land, and issues such as the concessionaire getting a free hand on deciding fares. Additional Chief Secretary, Finance, K.M. Abraham informed the board that the department had not gone into the detailed project report prepared by the DMRC. It was informed that the Cabinet would take a call on the Light Metro after getting a report from the Finance Department and remarks from the DMRC. The board did not take up the consultancy agreement for the Light Metro though it was listed on the agenda. A three-member committee of IAS officials set up to finalise the agreement with the DMRC was yet to submit its report .

DMRC is for the option where both the state and central governments put in a 20 per cent investment each in the project and the rest 60 per cent to be borrowed as loan. “With the DMRC option, a 20-year repayment period would be effective which has to be met from the profit of running light metro rail. One reason DMRC put forward the suggestion was that the PPP model will be more time-consuming to realise the project. While taking the loan, interest rate might be bit higher as well,” said Sheikh Pareeth, managing director of Kerala Monorail Corporation Limited.

The board also decided to give Rs.9 crore as consultancy fee due to the DMRC for the DPR of the scrapped monorail. The DMRC decided not to press for the Rs.27 crore due to it as fees as the monorail was scrapped due to prohibitive cost.

It was also decided to give Rs.35 lakh to the National Transportation Planning and Research Centre as fees for the initial feasibility study carried for the monorail project in the two cities.

Speaking at the Cabinet briefing, Chief Minister Oommen Chandy said both the Planning Board and DMRC principal adviser E Sreedharan have presented their proposals regarding the project. “Now the Finance Department will go through the suggestions. The final call will be taken by the Cabinet,” he said.

Vice-chairman, KMCL, and Public Works Minister V.K. Ebrahim Kunju; Ministers V.S. Sivakumar, M.K. Muneer, and Manjalamkuzhi Ali; Chief Executive Officer of the Kerala Road Fund Board P.C. Harikesh; and all board members attended the meeting.

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