Finally, railway funds for East-West Metro project for Kolkata

KOLKATA: The East-West Metro project that was reeling under acute funds crunch has received a shot in the arm with the railways agreeing to provide its contribution during the current fiscal. The decision was taken at the meeting of the board of directors, Kolkata Metro Rail Corporation (KMRC), in Delhi on Wednesday.

H K Sharma, managing director, KMRC, told on Thursday: “As the board of directors met in Delhi, railways agreed to pay whatever equity was allotted to it for 2013-14. Railways have agreed to release the Pass Through Assistance (PTA) against the Jica (Japan International Cooperation Agency) loan.” Railways resolved to seek subsequent allocations from the department of economic affairs under the finance ministry of finance.

The Jica sanctioned a soft loan worth Rs 2,253 crore (45 % of the total cost) with a moratorium of 18 years for the 16-km urban railway project. The East-West Metro project is being developed jointly by the railways and the ministry of urban development through a special purpose vehicle – the Kolkata Metro Rail Corporation (KMRC).

KMRC has sent a proposal of around Rs 700 crore to the railways for 2013-14. Of this Rs 300 crore is earmarked as equity payment and Rs 400 crore as PTA. Earlier, at a meeting on May 10 in Delhi, railways had expressed its inability to fund the East-West Metro project as it was going through a paucity of funds itself. Railways also proposed to transfer some of its stake to the urban development ministry, so that the latter could take care of the funds.

Earlier this year, the Mamata Banerjee government, after much dilly-dallying, gave up its 50% share and the ministry of urban development its 24% share, making railways a 74% stakeholder in Kolkata’s most ambitious infrastructure project.

For the first time this budget, the Rs 4,874-crore East-West Metro figured in the railways’ Pink Book as Rs 100 crore was allocated. But there was no provision for claiming Jica loans with no mention of Pass Through Assistance (PTA). Loans from Jica can be disbursed only if the railways make a specific provision in its annual budget. Since no such provisions had been made in the 2013-14 budget, funds critical to the project were effectively blocked.

Wednesday’s meeting, therefore, evoked much optimism. “At least, railways have agreed to make allocation under PTA, paving the way for disbursement of the Jica loan,” said an official at KMRC.

Union minister of state for railways Adhir Chowdhury said, “After a lot of push, I was able to include a Rs 100-crore allocation in the budget in March, this year. We are desperately trying to generate more funds because the project is crucial for Kolkata. Let’s hope for the best.”

KMRC has put the cost for the current fiscal at Rs 920 crore. Of this, Rs 400 crore was attributed as PTA for the Jica loan. The total equity cost of railways is Rs 1,058 crore, of which Rs 100 crore was allocated in the rail budget. Of the Rs 920 crore, railways agreed to pay Rs 700 crore through 2013-14. The urban development ministry which has an equity cost share of Rs 364 crore in the project has already paid Rs 334 crore.

Even after the equity handover, Kolkata’s most ambitious infrastructure project seems to have become a casualty of the political slugfest between the Congress-led UPA-II and Trinamool Congress, with the latter showing reluctance to cooperate with KMRC. And now, the project is smarting under severe funds crunch.