Delhi Metro Phase-IV project: Why the wait for Delhi government’s approval just got longer!

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Updated: Nov 22, 2018 6:03 PM

Due to multiple changes in the estimated cost of construction, Delhi government has asked DMRC to take the project back on its board, before it is placed before the Cabinet for a final nod.

Delhi MetroDMRC will take the project back to its board to seek its re-approval before it is placed before the cabinet for the final nod

Delhi Metro Phase IV: The wait for the Delhi government’s approval for the much-delayed Phase IV project of Delhi Metro just got longer. According to a TOI report, the Delhi government has asked Delhi Metro Rail Corporation (DMRC) to take the project back to its board to seek its re-approval before it is placed before the cabinet for final nod. Officials were quoted in the report saying that the board’s re-validation was mandatory as the estimated cost of construction for the project has changed twice. First the cost came down from Rs 55,208 crore which was estimated in the first detailed project report to Rs 45,603 crore. Then, it was again revised to about Rs 46,800 crore. The cost which was set in 2014 was estimated on an earlier tax regime. Then, it was reduced by Rs 10,000 crore by taking taxes as per GST into account. However, after slashing the cost the estimate has now gone up slightly.

A Delhi government official was quoted in the report saying that the estimate has marginally gone up as DMRC had earlier failed to factor in the cost of the procurement of metro coaches and laying down tracks on certain stretches. Officials were quoted saying that the state government will be funding 25% of the total project cost, which is likely to be close to Rs 12,000 crore, in the next six years. While it has decided to make a provision of Rs 1,000 crore for Phase IV expansion in its revised budgetary estimates for the current fiscal, Rs 2,000 crore would be set aside each year in the budget from the next financial year.

Senior government officials were quoted saying that the project was initially proposed to be tabled before the Delhi Cabinet on Thursday. However, it will now have to wait for the DMRC board’s approval, which might take about three weeks. Apart from the change in the overall cost, there have also been changes in the loan component of the project, which has necessitated the re-approval of the DMRC board. Moreover, the proportion of the loan to be provided by Japan International Cooperation Agency has come down to 43%, while it was 60% during Phase I and 54% and 51% in Phase II and Phase III, respectively. Now, the project can only be approved by the Centre once Delhi government provides its approval and financial commitment.

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