By: Vivek Gupta
The future of the Chandigarh Metro project now rests with the Centre. In a recent communication, the Chandigarh Administration has once again conveyed to the Union Ministry of Urban Development that it is against undertaking this capital intensive project through public-private partnership, as proposed by the ministry, and wants changes in the draft memorandum.
However, both Punjab and Haryana, which are equal stakeholders in the project, have so far been silent on the funding.
“We have made our stand clear to the Centre that this projects needs to be undertaken with government funding. We expect some clarity once the ministry’s response is received, which is likely soon,” said UT Finance Secretary Sarvjit Singh, who is the nodal officer for the project.
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The project, which requires an investment of more than Rs 10,000 crore, is held up for several years due to shortage of funds.
A draft memorandum of understanding, which was to be signed by UT, Punjab and Haryana for constructing the metro in Tricity in a phased manner, was first sent by the Urban Development Ministry in June, 2013.
It was soon sent back by the Administration which opposed the clause for the project’s execution on PPP mode, saying the project was ill-suited for private investment. But the clause remained unchanged in the revised memorandum sent by the ministry in February, 2014.
In its letter now, the Administration has stressed that the experience of private-public partnership is such projects, be it in Delhi or elsewhere, has not been very encouraging because private investors look for profit within a few years, which a public transport project does not offer.
In such a scenario, the private partner is driven to exploit the print of the voluminous contracts so as to siphon off the potential of the associated real estate, thus putting the project in jeopardy, reads the letter.
With the letter, the Administration has attached the responses of Punjab and Haryana to the revised draft memorandum. Both have only said that the managing director of the project must not be imposed by the central government, but must be chosen in consultation with the board of directors.
An agreement on the draft memorandum is necessary for the formation of the special purpose vehicle that will execute the project. The stakeholders have, however, agreed to name the SPV as the Greater Chandigarh Transport Corporation (GCTC).