Thiruvananthapuram and Kozhikode Light Metro: Crucial Meet Today

Thiruvananthapuram (TVC): As chief minister Oommen Chandy is all set to meet principal adviser of Delhi Metro Rail Corporation Ltd (DMRC) E Sreedharan on Monday to sort out issues in implementation of light metro projects in Thiruvananthapuram and Kozhikode, the debate over public-private-partnership (PPP) mode has intensified. The state government is dilly-dallying on a decision even after a strong objection on awarding the project on nomination basis to DMRC.

At a meeting convened on April 28, a consensus could not be reached between the DMRC and the Finance Department as both of them had stuck to their respective stands. Following this, the government has asked for 10 days’ time which ended on Monday.

While more bureaucrats have come out in open supporting finance secretary K M Abraham, a number of politicians, including KPCC President V M Sudheeran, have rallied up behind Sreedharan. Kochi Metro Rail Corporation MD and additional chief secretary Elias George has supported the proposal of hybrid-PPP model suggested by the Finance Secretary.

Though the official sources said that chances to adopt a partial PPP model is on the cards, the statement released by Dr.E.Sreedharan, Principal Advisor to DMRC, on Sunday, revealed that he had no intention of supporting the PPP model for the light metro projects. He also listed the flaws in pursuing a project like Light metro in the PPP mode.  Sreedharan claimed that the first hybrid version of PPP which was for Delhi airport line had resulted in much confusion.

tvc light metro‘’The condition was that the supply and installation of systems including operation and maintenance were entrusted to a private party on open tender basis. The cost of the civil structure and land  would be borne by the DMRC. However, the commissioning was delayed for six months. After operating the line for about one-and-a-half years, the private parties abandoned the project and walked out of the contract. Now they are fighting a case with DMRC.  Hence, such a formula for Thiruvananthapuram and Kozhikode light metro projects will not yield results, where revenue prospects are bleak compared to Delhi airport line,” he said, in a release issued on Sunday.  He also alleged that the PPP partner usually bloats the estimate, inflate  ridership figures and avail hefty loans from banks and then they pocket their profit and walk out.

‘’The operation of the Delhi airport line could be continued without any break as DMRC was the owner. But it will not be the case with Kerala Rapid Transit Corporation Ltd which does not have the experience and resources to suddenly take over the operation and maintenance in case the private party quits the project,” he stated.

KPCC president V M Sudheeran has written a letter to the Chief Minister stressing the need for the State Government to run the project and also to retain E Sreedharan at the helm of the project.  However, the Finance Department had openly questioned the project report prepared by the DMRC. Its major demand was to bring in private participation to which Sreedharan was firmly against. The department also wanted Kerala Rapid Transit Corporation Ltd  to take immediate steps to invite tenders to select a ‘project consultant’ for the project through an open and transparent international bidding process. Besides, they wanted the government to consider medium metro instead of light metro.

While Sreedharan is of the view enumerated above, Elias George said, “The conventional model is when the taxpayer’s money is spent upfront by the metro administration to invest in metro construction, and this money is given over to private corporate companies who undertake the various components of the project like the civil structure, the coaches, signalling, etc. In this model, the actual works are executed by the private companies who collect their money upfront and go away, while all subsequent operational and financial risks are left to be shouldered by the government or the metro administration. So basically in this model, the private companies, who actually execute the project make their profits and leave the scene after the project is commissioned, while the likely losses and the operational risks of the system are left to be borne by the metro administration and the public. It is pertinent to remember in this context that out of the 200-odd metro projects operational worldwide, only a very small handful are making money, while all the rest are bleeding financially”.  Another allegation against DMRC was that it had taken a consultation fee of Rs.9 crore and then they abandoned the project.

In the meeting scheduled for Monday, the government is all set to present the views of finance department that only hybrid PPP model will be effective for implementing light metro. But the government will seek the support of E Sreedharan to lead the project and also execute the portions such as civil works which won’t be coming under PPP mode.