Borrowings will be pegged at Rs1016 cr; completion cost estimated at Rs1957.05 cr
By CL Jose
KOCHI/September 09-2-22: Kerala state will have to cough up Rs314.46 crore towards the Kochi Metro second phase that is proposed to run from JLN Stadium to Infopark, and passing through Kakkanad.
Though financial viability of public utility services sectors such as public transport, water supply or electricity generation & transmission, shouldn’t be viewed from a profitability perspective, there are fears expressed by certain corners that the new project could exasparate the state finances further.
The first phase of Kochi Metro itself poses ‘enough’ financial challenges to the state as the project hands out about Rs1 crore monthly loss.
While Rs274.90 crore will be the state’s contribution towards the equity of the project that is projected to be completed at a cost of Rs1957.05 crore, the state will also be required to pay up Rs39.56 crore as the interest during construction (IDC) for loan, and the front- end fees.
The project will have a loan component to the tune of Rs1016.24 crore to be availed from bilateral/multilateral agencies.
The loan thus availed will account for 60 per cent of the total cost of the project, estimated at Rs1693.74 crore, excluding land, resettlement & rehabilitation (R&R) and PPP component. The total completion cost is projected to be Rs1957.05 crore.
While both GoI and GoK will chip in Rs274.90 crore each into the project as their equity, this will together contribute 32.46 per cent of the total cost of the project at Rs1693.74 crore. (excluding land and R&R)
Moreover, the project will carry subordinate debts issued to GoK and GoI to the tune Rs63.85 crore each in order to cover the component of Central taxes attracted by the project.
Besides this, another subordinate debt valued at Rs82.68 crore will be issued to Kerala Government towards land including R&R cost, even as the state taxes will be borne by Kerala government.
A recent Union Cabinet meeting two days ago accorded the go-ahead to the Kochi Metro second phase project, which will have 11 stations covering a length of over 11 kmts.
The first phase of the Kochi Metro project that operates between Aluva and Petta had an estimated completion cost of Rs5181.79 crore.
In a statement after the cabinet meeting, the government said preparatory work for the second phase, including road widening of the Seaport-Airport Road, are progressing well.
The Kochi Metro Phase 1A project of viaduct of 1.80 km between Petta to SN Junction with an approved cost of Rs 710.93 crore is being implemented as a state sector project.
Kochi Metro Phase 1 B Project of 1.20 km from SN Junction to Thripunithura Terminal is also under construction as state sector project.
