Metro PHIV project cost slashed by ₹ 10,000 cr
DMRC PLAN Move comes ahead of crucial approval from Delhi govt
NEW DELHI: The cost of Delhi Metro’s long-delayed Phase-iv was slashed by nearly ₹10,000 crore in late September, a month before the Delhi government, which deferred its approval for two years citing its financial viability, signalled its willingness to approve the project.
According to the revised detailed project report (DPR) of Metro Phase-iv, prepared in late September, a copy of which has been seen by Hindustan Times, the Delhi Metro Rail Corporation (DMRC) has now pegged the total cost of all the six corridors of Phase-iv at ₹45,603 crore. This was ₹55,208 crore in the first DPR submitted to the Central and Delhi governments in 2016.
On October 29, transport minister Kailash Gahlot asked commissioner Varsha Joshi to prepare a cabinet note for all the six corridors of the project for approval. After a wait of more than two years, the metro Phase-iv proposal will finally be tabled before the Delhi cabinet next week. It wasn’t clear whether the reduced cost played a part in Gahlot’s decision.
“The fresh details of the Phase-iv project has not yet reached my office. But if the cost has actually reduced by about ₹10,000 crore, then it is good for all stakeholders. In the end, people’s money is being saved,” said Kailash Gahlot, Delhi transport minister.
DMRC said the total expenditure on Phase-iv has been reworked keeping in mind current prices and a new tax regime. “The earlier cost was estimated in 2014 but were worked out taking into account inflation. As these levels are elastic there is variation in the final costs. Also, the previous cost was worked out based on the earlier tax regime. Now, taxes as per GST have been taken into account,” said Anuj Dayal, executive director, corporate communications, DMRC.
The reduction in the expenditure will also reduce Delhi government’s contribution to the project. Instead of having to pay ₹11,334.50 crore, it will now have to pay Rs 10,636.50 crore. The Delhi government did give an in-principle approval to the project in May 2016, but subsequently chose not to follow up; the project became another bone of contention between the Delhi government and the Centre.
Worried by the cost involved and the subsequent metro fare hikes (which resulted in commuter angst), the Delhi government in 2016 asked the finance department to conduct a feasibility study on Phase-iv. In its report, the finance department wrote that the project could turn out to be a “colossal waste of money” and declared three of the six corridors “financially unviable”. Following this, the Delhi government refused to approve the project.
The DMRC also said that an another reason for cost reduction was its review of cost escalation of the project. “The earlier cost of ₹55,208 crore had annual escalation factor of 7.5%. After a review it was realised that the escalation could be reduced to 5% per year,” Dayal said.
The new project report for Metro Phase-iv, which is also DMRC’S most expensive metro project in Delhi till date, was prepared on the direction of the union Ministry of Housing and Urban Poverty Alleviation, dated September 10, 2018.
The latest DPR states the 104-km network is expected to be completed by December 31, 2024. First DPR Latest DPR
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