Plus & Minus

“A weekly column: Plus&Minus will be published in Hindustan Times, Jaipur Live. This will speak to the ordinary reader on contemporary economic issues in a simple format”.

    Debate rages on how to implement Metro project
    Hindustan Times Jaipur Live, June 21, 2010

By Pradeep S Mehta

It was widely reported in the media that the state cabinet approved to take the Jaipur Metro forward on public-private-partnership (PPP) model in late April 2010. However, suddenly a month and a half later, the state government has now changed its track and wishes to combine the expertise of the Delhi Metro Rail Corporation (DMRC) with private partners for the Jaipur Metro.

The proposal has been approved by the urban development minister Shanti Dhariwal a couple of days back after discussions with officials of Union government and Asian Development Bank (ADB). The proposal will soon be sent for the state cabinet’s approval. “It has been decided the DMRC shall be handed over the responsibility for the construction of the metro corridor, while the rolling stock will be developed in a PPP model. A similar model has proved effective in Delhi,” said Dhariwal.

It is clear that this has been necessitated by the Chief, Delhi Metro Rail Corporation (DMRC), E Sreedharan – a diehard critic of the PPP model for metros across the country. In fact, he has reportedly expressed a desire to dissociate DMRC from the Jaipur Metro Rail Project if the state government proceeds with the PPP model.

However, recent implementation of similar metro rail projects in Hyderabad and Mumbai reveals that the Planning Commission favours the PPP mode in large infrastructure projects. The state government was looking at increasing the percentage of viability gap funding from the central government. The viability gap funding is a special scheme to support financial viability of infrastructure projects that are economically justifiable but not commercially feasible in the immediate future. The viability funding scheme provides for an upfront grant of up to 20 percent of the project cost for state or central PPP projects that are being implemented by a private sector developer.

The turf war between the Planning Commission and DMRC has, at the moment, jeopardised the future of the Jaipur Metro. While the former points to the PPP model as being the most suitable, the latter expresses serious doubts on whether a private investor would be interested in a project of this magnitude due to inadequate traffic density in Jaipur. It is also being questioned as to how the state government can nominate DMRC to do part of the job without a transparent bidding process.

Given the indecision and contrary views in the matter, perhaps it is time to go back to the drawing board to re-examine whether Jaipur needs a metro or whether some alternative and cheaper mode of rapid transport such as monorail should be considered. And if metro is the way forward then to invite private sector investors to work on a PPP model. Granted that the DMRC has good experience of building and running a metro rail project in Delhi, but that is because its boss, Sreedharan was given the complete freedom to implement the project, even though today he is quite old, over 78 years of age. We cannot create another Sreedharan here to implement the project, and we may land up with another Bisalpur-style project whose costs and time period over ran hugely.

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