Delhi Metro Rail Corporation (DMRC) has asked the Delhi government to create a special fund to help the company reduce its debt burden. DMRC is currently burdened with nearly Rs 16,000 crore borrowings and is about to borrow more as it has to develop six additional corridors which will cost more than Rs 21,000 crore. The debt-equity ratio of the Delhi Metro project is 2:1.
?We have to undertake the third phase of Metro rail. We also want to enable passengers to commute from any point of the city to any point without changing trains, which is not possible under the present network. This will need a lot of money. To meet the requirement, we have asked the (Delhi) government to create a fund with an annual incremental corpus of Rs 1,000 crore,? DMRC managing director E Sreedharan told FE.
DMRC submitted the detailed project report for the third phase in March 2010 pointing out the requirement for creation of the fund christened Dedicated Mass Transit Fund, a part of which will be used for the bus rapid transit system, better parking facilities, improved bus stands, etc. ?We will use Rs 600-Rs 700 crore a year out of this fund,? Sreedharan said.
The government is currently considering the proposal. ?It is evaluating certain sources of revenue for the corpus,? DMRC director (finance) N Joshi said in reply to an email query. He said it will take some time for the fund to be set up, since after an in-principle approval from the government, ?there will be certain statutory enactments.?
The fund is also proposed to reduce the possibility of cash crunch for the forthcoming projects as JICA has not been willing to contribute as much as demanded. JICA, which met the majority of fund requirement for the previous two phases, has indicated that it could not give a loan of 40% of project cost.
?JICA is willing to give 30% of what is necessary for the new phase. But we need at least 40% from them; otherwise, the Centre and Delhi government will have to increase their share, which is uncertain as a lot of money was spent on the Commonwealth Games,? another senior official of the company said asking not to be named.
About the loan repayment potential of the entity, Joshi said: ?DMRC is meeting all its repayment commitments. All the amount due till date amounting to Rs 611.01 crore have been repaid to the Government of India?. DMRC can pay back the loan for phase I by 2035 and for phase II by 2040.