Ahmedabad Metro to get financial aid from Centre

The new board that will take shape in the coming days, will have five directors from the state government, and five more from Centre.

The Ahmedabad Metro train project will now get both financial and manpower assistance from the Narendra Modi-government. The Metro-Link Express for Gandhinagar and Ahmedabad Company Ltd – a special purpose vehicle or SPV that is executing the project – will now be reconstituting its board to include at least five representatives from the central government.

“Till now MEGA was a 100 per cent state government company. But from now on, the Centre will be a 50:50 partner in the SPV. So in the next one month we will be reconstituting our board to include representatives from Centre,” said a senior official of MEGA. The Ahmedabad Metro is following the SPV model of the Delhi Metro.

“Both the state and the central government will have an equal say in the company (once the board is reconstituted),” the official added. The present board of directors constituting of about four members has Dr Manjula Subramaniam as the director and chairperson of the company.

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The new board that will take shape in the coming days, will have five directors from the state government, and five more from Centre. “A secretary and two Union Urban Development Department, one executive director from the Railway Board and one director from any of the metros chosen by the Centre will join the new board as directors,” the official added.

In the coming days, necessary changes will be made to the memorandum of association and the article of association of MEGA. The reconstitution of the MEGA board that was approved by the state Cabinet on Wednesday will also help in infusion of additional equity from the Narendra Modi-government.
The first phase of the project, that will cost about Rs 10,700 crore, had just Rs 1,990 crore as equity. Now with the Centre becoming an equal partner in the project, it is expected to pump in an additional Rs 1,990 crore into the first phase, taking the total equity to Rs 3,980 crore.

“The rest of the money needed for the project will be sourced as debt/loans,” the official added. MEGA has already approached JICA for a Rs 5,900-crore loan for the first phase of the project.

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