#DelhiMetro: Phase IV construction to cost Delhi-govt Rs. 1,200cr extra

Shiladitya Ray


#DelhiMetro: Phase IV construction to cost Delhi-govt Rs. 1,200cr extra

20 Oct 2018: #DelhiMetro: Phase IV construction to cost Delhi-govt Rs. 1,200cr extra

The Delhi finance department's fears about the proposed Delhi Metro Phase IV project bleeding the state exchequer have come true.

With the imposition of GST on the project, the share of the Delhi government in the metro project has gone up by a whopping Rs. 1,200cr in taxes, while the cost of the project has remained the same.

Here are the details.

Details: DMRC, Delhi govt at loggerheads over the increased cost

Before the introduction of GST, the total cost of the proposed Delhi Metro Phase IV project was Rs. 52,625cr, of which the Delhi government's share was Rs. 11,334cr.

However, after GST implementation, the Delhi government's share has gone up to Rs. 12,597cr.

Understandably, the increased cost has led to a war of words between the Delhi government and the Delhi Metro Rail Corporation (DMRC).

Fact: Possibility of the project progressing is "bleak", say sources

"Possibility of any progress turned extremely bleak after the war of words...Also, the DMRC's approach did not go down well with the government. The money involved is huge and the finance department has time and again raised red flags," sources told IE.

Objections: The finance department had raised red flags earlier too

Interestingly, back in 2015, the Delhi finance department raised questions about the DMRC's detailed project plan (DPR), and had stated in writing that the Phase IV project had the possibility of becoming a "colossal waste of money".

It had further said that there had been no "analytical engagement" with the DMRC's DPR, and that the DPR should be investigated by experts from relevant fields.

Fact: The project proposal needs to be reviewed by experts

"The DPR for Phase IV estimates an investment of Rs. 50,000-Rs. 55,000cr, which needs to be apprised. Clearly such expertise is not domiciled in government. I would suggest...to assemble experts from [relevant] fields...to discuss the DPR and give their expert advice," former Principal Secretary (Finance) S N Sahai had written back then.

Reiteration: In March, the finance department again called for a re-examination

In March 2018, the finance department reiterated its proposal to have the DMRC's DPR examined by experts.

It had added that finance department officials and DMRC officials should work together to calculate the quantum of operational losses and its impact on fares.

However, neither the 2015 suggestion, nor the one this year saw the light of day.