Delhi Metro Phase IV on halt over cost-sharing dispute between Center and State government

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The Phase IV metro of Delhi received yet another setback with a commotion between the central government and the Delhi government on the cost-sharing dispute with revising the report of the project.

The state government wrote to the center that it will be unable to fund the Delhi metro project as per the revised cost sent by the central government.

In December 2018, the Delhi government proposed the six corridors of Phase IV project in a letter sent to the center, which was approved by the center last month with some modifications. The central government approved the three out of a total of six corridors.

According to the sources, the central government has revised the project and increased the share of funding by the Delhi Government in the project. Delhi Government wrote a letter last week saying that we will fund the project according to the previous share, not the revised one.

According to the transport official, The Delhi government and central government, both pay an equal amount of equity and subordinated debt amounting to 20% of the project cost each. He further adds, “when Delhi government proposed six corridors, the amount was ₹46,000 crores where the Delhi government had to contribute a total of ₹11,000 crores. However, with the center approving to only 3 corridors, the cost is reduced to ₹5,000 crores.”

“According to the revised project, the central government is asking a share of ₹7,800 crores from the Delhi government,” Kailash Gahlot, the transport minister said.

Gahlot accused the center of changing the cost when the detailed report has already been submitted and approved. He regarded this as legally, ethically and morally wrong.

Gahlot said that any changes in the report that says the cost paid by the Delhi government has to be increased, will be taken to the cabinet and until then no proceedings over the project will take place.

Delhi Government has explained its stand at the meeting of Public Investment Board, an inter-ministerial panel for approving any investment by the center. And thus the project was approved on the basis of a mutual fund sharing formula.


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