State keen to start metro rail project without loan approval

BHOPAL: After failing to get financial commitment from Japan International Cooperation Agency (JICA) on board for its ambitious Metro rail project for Bhopal and Indore, Madhya Pradesh government is planning to go ahead with the project on its own. The state is considering starting the project with its equity and then look for funding partners.
Sources say the government is keen to have a soft launch of the Metro ahead of next assembly elections.
According to a new proposal firmed up, MP government will have an equity stake of 20%, Union government another 20% and 60% of the project cost will be raised through financial assistance from European Investment Bank (EIB) or Asian Development Bank (ADB).
EIB has been approached through Centre's department of economic affairs, said state government officials. Long-term financing by EIB is unlikely to be on favourable terms as was the case with JICA. In the proposal before the Japanese agency, the equity of the Union government was 20% and 80% of the funding was through a 30-year soft loan, say officials.
At least Rs 7,000 crore is proposed to be required for construction of Bhopal metro. First phases of the project, 27.81 km connecting Karond to AIIMS Bhopal (14.3 km) and another to link Bhadbhada and Anand Nagar (12.34 km) has been delayed with JICA funding now virtually off the grid.
"Metro rail for Bhopal and Indore is under consideration. As soon as modifications in the proposal are received, Union government will assist in development of metro in Madhya Pradesh," said Union minister of urban development, housing and urban poverty alleviation and information and broadcasting, Venkaiah Naidu, on Monday. He was in Bhopal to review progress of new urban schemes in Madhya Pradesh.
Upbeat about the start on metro rail, MP urban development and environment commissioner (UAED) Vivek Aggarwal said, "Our basic groundwork is ready. Project can begin and simultaneously loan can be secured."
The indications are that if the state government secures Rs 1,500 crore from the Union government, MP Metro Rail Company would have Rs 3,000 crore of the estimated Rs 7,000 crore for the Bhopal Metro rail project - just about enough to kick-start the project on its own.