Pune Metro: Centre clears way for loan of Rs 6,325 crore

The loan will be directly taken by the Special Purpose Vehicle for Pune metro with sovereign guarantee being provided by the union government.

By: Express News Service | Pune | Published:September 17, 2016 12:05 am

The much-delayed Pune metro rail project is all set to get a loan of Rs 6,325.50 crore from World Bank (WB) and China-based Asian Infrastructure Investments Bank (AIIB), with the union government approving the state government proposal for multilateral assistance for the project.

In a communication, the department of economic affairs of the union finance ministry conveyed to the state government that the screening committee had approved its proposal for multilateral assistance of Rs 6,325.50 crore for the first phase of Pune metro rail project on certain conditions.

As per the conditions, the loan will be directly taken by the Special Purpose Vehicle (SPV) for Pune metro with sovereign guarantee being provided by the union government. The loan would be co-financed by Word Bank and AIIB, which would be split in two-three smaller tranches.

According to sources, the repayment of the loan would be the responsibility of the SPV, which would do that from the revenue from ticket fares and means like development charges from structures alongside its route and extra cess collected by the civic body.

Municipal Commissioner Kunal Kumar said the loan would constitute 50 per cent of the total cost. The remaining cost would be borne by the union government, state government and PMC-PCMC. The union government would contribute Rs 2,118 crore, the state government Rs 2,430.40 crore while PMC and PMC would together contribute Rs 1,278.40 crore.

“The process for completing the formalities for the loan would be completed in next few months. It also includes final approval of the union government,” Kumar said, adding the work on the project would be started immediately after the union government’s approval as the loan funds would be available.