Mantralaya ask Nagpur Municipal Corp to increase share in the Metro Rail project to 10%

State wants bigger share from NMC for Nagpur Metro Rail

ngp metroNagpur (NGP):  The city’s ambitious metro rail project is set to face another acid test. The state government has asked the Nagpur Municipal Corporation (NMC) to increase its share in the project to 10%. Now, the cash-strapped civic body faces the uphill task of contributing Rs.900 Crore in the project within five years. This is even more than the civic body’s total annual revenue, which is about Rs.800-850 crore.

The NMC’s town planning department has submitted a proposal before the standing committee, seeking its approval for NMC to bear 10% of the project’s total cost. The state’s planning and finance department has suggested 10% share from the NMC.

On October 11, 2013, the NMC general body gave consent to bear 5% of total project’s cost. However, this came with a rider. The NMC’s condition was that it would not bear a single penny beyond the approved cost. NMC sources told that the condition might have prompted the state’s planning and finance department to clarify to NMC about the chances of increase in the project cost, which would automatically increase NMC’s share. “NMC’s financial condition is not even strong enough to bear 5% of the total project cost. The earlier consent was also given to just to avoid criticism,” the sources said.

If NMC’s revenue data is considered, the 10% share amount is slightly more than NMC’s annual revenue, which is around Rs.800-850 crore. The committed expenditure of the NMC comes to around Rs.650 crore, leaving Rs.150-200 crore for developmental works. If NMC agrees to 10% share, the NMC will have to bear Rs.180 crore in every fiscal for next five years which means transferring entire funds reserved for developmental works to metro rail.

However, there is a sliver of hope. The NMC’s share can also come down to some extent. Earlier, the metro rail’s project cost was calculated at Rs.9007 crore. A month ago, the nodal agency for the project Nagpur Improvement Trust (NIT) had announced reduction in project cost to Rs.8421 crore. The civic body will have to bear Rs.842 crore instead of Rs.900 crore.