Cabinet set to clear pact on monorail projects

The agreement and terms of conditions to be signed with the Delhi Metro Rail Corporation (DMRC), the general consultant for the monorail projects in Thiruvananthapuram and Kozhikode, have been cleared by the director board of Kerala Monorail Corporation Limited (KMCL).

Drafted by KMCL, the special purpose vehicle (SPV) established by the State government to execute the elevated mass rapid transit system (MRTS) in the two cities, the agreement and terms of conditions were cleared by the KMCL board, chaired by Chief Minister Oommen Chandy, on Saturday.

Minister for Public Works V.K. Ebrahim Kunju, who is on the KMCL board, told that KMCL had forwarded the agreement to the government on Monday to be placed before the Cabinet for discussion and clearance.

Single agreement

A single agreement has been drafted for the projects of the two cities as the general consultant and the executing agency are the same. Only after it is cleared by the Cabinet and other formalities are completed, Mr. Kunju said, the date of signing the pact with the DMRC will be finalised.

The DMRC will get 3.25 per cent of the estimated total cost of Rs.5,581 crore as consultancy fee as decided at a board meeting in April. Of the Rs.5,581 crore, Rs.3,590 crore is expected to be incurred for the Thiruvananthapuram project and Rs.1,991 crore for Kozhikode.

Mode of payment

Although KMCL pushed for the ‘milestone payment’ mode to pay the 3.25 per cent consultancy fee, it did not work out. The board decided to go for the ‘quarterly’ payment mode as suggested by the DMRC, sources said.

The DMRC, which prepared the Detailed Project Report (DPR) for the two projects, had suggested a turnkey contractor for operation and maintenance of the projects in the initial five years after commissioning.

The KMCL’s performance guarantee clause, another bone of contention between the SPV and the DMRC, was avoided in the April board meeting of KMCL itself as it was not acceptable to the DMRC, sources said.

With the Cabinet set to clear the agreement with the DMRC, the real challenge now will be to select the funding agency. The Japan International Cooperation Agency (JICA) has evinced ‘keen interest’ to fund the monorail project.

The authorities are thinking of roping in Agence Française de Développement (AFD), the financial institution and the main implementing agency for France’s official development assistance to developing countries and overseas territories. But the funding will have to be cleared by the Centre and the Union Department of Economic Affairs.

The 22.2-km monorail has been mooted from Technocity to Karamana in Thiruvananthapuram and the 14.2-km monorail (with 15 stations) from the government medical college hostel area to Meenchantha in Kozhikode.