Delhi Metro Phase IV: Cost of ambitious project slashed by Rs 10,000 crore ahead of nod from Delhi government

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Published: November 5, 2018 3:28:01 PM

The proposed lines for Delhi Metro phase IV are; 28.92 km long Janakpuri (west)-RK Ashram, 12.54 km long Mukundpur-Maujpur, 21.73 km long Rithala-Narela, 20.20 km long Tughlakabad-Aerocity, 12.58 km Inderlok-Indraprastha and 7.96 km long Lajpat Nagar-Saket G-block sections.

Delhi MetroThe cost of the much-delayed Phase-IV project of Delhi Metro has been drastically reduced by Rs 10,000 crore in September.

The cost of the much-delayed Phase-IV project of Delhi Metro has been drastically reduced by Rs 10,000 crore in September, just around a month before the government of Delhi approved the project, according to an HT report. As per the revised detailed project report (DPR) of Delhi Metro Phase-IV project, which was prepared in the month of September, the Delhi Metro Rail Corporation (DMRC) has brought down the total cost of all the six corridors of Phase-IV project at Rs 45,603 crore. However, in 2016, when the first DPR was submitted to both the Central government and the Delhi government, the total expenditure amount was estimated at Rs 55,208 crore.

The proposed lines for Delhi Metro phase IV are; 28.92 km long Janakpuri (west)-RK Ashram, 12.54 km long Mukundpur-Maujpur, 21.73 km long Rithala-Narela, 20.20 km long Tughlakabad-Aerocity, 12.58 km Inderlok-Indraprastha and 7.96 km long Lajpat Nagar-Saket G-block sections.

According to the report, Kailash Gahlot, Delhi Transport Minister, on October 29, asked commissioner Varsha Joshi to prepare a cabinet note for all the six metro corridors of the project for approval. Now, after a wait of over two years period, the proposal will finally be tabled before the Delhi cabinet. Initially, it was not clear whether the reduced expenditure played a part in Gahlot’s decision. The minister was quoted in the report saying that the fresh details of the Phase-IV project have not yet reached his office. He further said that if the total cost has actually reduced by nearly Rs 10,000 crore then it is good for all stakeholders as at the end, people’s money is being saved.

According to DMRC, keeping in mind current prices and a new tax regime, the total expenditure on Phase-IV project has been reworked. Anuj Dayal, Executive Director, Corporate Communications, DMRC was quoted saying that earlier the costs were estimated in the year 2014 but were worked out taking into account inflation. He said that as these levels are elastic there is variation in the final costs. Also, the previous project cost was worked out based on the earlier tax regime, Dayal informed and added that now, taxes as per GST have been taken into account. The expenditure reduction will also reduce government of Delhi’s contribution to the project. Now, instead of paying Rs 11,334.50 crore, it will have to pay Rs 10,636.50 crore.

According to DMRC, another reason for cost reduction was its review of cost escalation of the project. Dayal said that earlier the cost of Rs 55,208 crore had annual escalation factor of 7.5%. However, after a review it was found that the escalation could be reduced to 5% per year, he added.

DMRC’s most expensive metro project in the national capital till date, Delhi Metro Phase-IV, was prepared on the direction of the Union Ministry of Housing and Urban Poverty Alleviation, on September 10, this year. According to the latest DPR, the 104-km long Metro Phase-IV network is expected to be completed by the end of December 2024.

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