Finance for Nagpur Metro Rail almost tied up: Maharashtra CM

Nagpur: The finances for the ambitious Nagpur metro railway have been almost tied up and the necessary paperwork will be completed within a few weeks. “Two agencies – Agency Francaise de Developpement (AFD) of France and KfW Bank of Germany have agreed to provide the required funds,” chief minister Devendra Fadnavis told.

Fadnavis held a meeting with Brijesh Dixit, managing director of Nagpur Metro Railway Corporation Ltd (NMRCL), on Friday morning to review progress of the project. Construction of Mihan depot to Airport stretch has already started. The CM said a delegation of AFD would meet him in Mumbai next week. “We will discuss rate of interest, duration of the loan, terms and conditions, etc. We will try to get concession on account of the fact that metro rail is also a part of government’s social commitment,” he said.

On state government’s part of financing, he said that Rs.500 crore would be sanctioned this fiscal. “An allocation of Rs.200 crore has already been made in the budget,” he said.

Dixit later told that the rate of interest is expected to be around 2%. “However, due to constant depreciation of the rupee against US dollar the interest rate will go up by another 6%. This figure has been arrived at by taking the depreciation of rupee in the last 10 years into account,” he added. “In spite of currency depreciation, such loans are a better choice because Indian financing agencies charge over 10% interest. Moreover, they give a loan for only 10 years at the most, whereas we want for 20 years,” he added.

The lending agencies do not get benefited by currency depreciation and they get only 2% interest. However, that is still profitable for them because in developed countries the rate of interest is only 0.5%.

Not only foreign finance agencies but engineering firms too are showing keen interest in the project. “A team of Germany government’s railway company Deutsche Bahn is in the town to inspect the metro corridors. Our website has got a lot of hits from global construction firms. Some have sent queries too,” Dixit said.