Metro Rail: State begins talks

THIRUVANANTHAPURAM: The implementation of Kochi Metro Rail Project is fast gathering momentum with the state beginning formal discussions with the Planning Commission to iron out the differences over Centre’s equity participation in the project.A discussion in this regard was held between Kochi Metro Rail Project managing director Tom Jose and Planning Commission member in charge of transport projects, Arun Maira, in New Delhi last week, which would now be followed up by further discussions in the coming weeks."The Centre’s equity participation is very important to us. The state will have to convince the Finance Ministry about its debt sustainability while borrowing from an external agency, in case the Centre refuses to hold equity in the project. This will lead to further complications,’’ Tom Jose told ‘Express’.A major point of non-convergence between the state and the Centre is regarding certain clauses if the Centre decides to be a stakeholder in the project. The Planning Commission had approved the metro project for Chennai with 15 per cent equity for the Centre. When it came to the Bangalore metro project, though the Centre had agreed to hold equity, it had put a rider that the operational loss would not be absorbed by the Centre.But Kerala has put forward the demand that the Centre should absorb the share of operational loss, if any, as the state had adopted a carbon-copy model of the Chennai metro project."We believe that it would just be a matter of a few rounds of discussions before the Planning Commission clears the proposal, as there are only minor issues remain to be sorted out”, Tom Jose said. He added that the next meeting with the Planning Commission officials would be held next week.The proposed model for the Kochi metro project, with an estimated cost of Rs 4,427 crore, demands 15 per cent equity participation of the Centre plus a 11 per cent subordinate debt which is another ingredient of the total project cost.  The state’s proposal has sought the subordinate debt in the ratio of 80:20, which would keep the Centre’s share of the debt at close to nine per cent.The subordinate debt, which is usually the amount met by the government from the exchequer, will be an interest-free loan to the company.