Another meet on Lucknow Metro ends indecisively

When contacted,Chief Secretary Mishra said,“Financial models were discussed but no final decision was taken in the meeting.” Lucknow Development Authority (LDA) vice-chairman Rajiv Agarwal refused to comment.

Another official said,“The members in the meeting studied both the models. A report about viability of both the models would be submitted to the Chief Minister very soon.”

DMRC and Larsen and Toubro had made a presentation of their respective models before Chief Secretary and other senior government officials on August 24.

In DMRC model,the Centre and state governments equally share 40 per cent cost while the remaining 60 per cent is taken by loan. In this model,there will be equal number of directors on its board from these governments. A Special Purpose Vehicle (SPV) is set up to supervise the project. While the Managing Director of SPV shall be the nominee of the state government,its chairman should be the Secretary,Ministry of Urban Development as nominee of Central government.

However,in case of PPP model- as adopted in Hyderabad project – a private developer is selected through two-stage bidding exercise. Developer bears the cost of project while Central government and state government could share the amount of Viability Gap Funding (VGF). VGF amount is quoted by the private developer.

According to Detailed Project Report (DPR) prepared by DMRC,the Lucknow metro project will cost Rs 12,671 crore. This includes Rs 9,519 crore for construction and Rs 3,052 crore as escalation and central taxes.

Sources said the state government is finding PPP model viable for Lucknow project as it will require to pay only Viability Gap Funding that could be shared with Central government. For the same reason,the government had sent an LDA team to Hyderabad for a detailed study of project and its funding model there. The team submitted it report to Chief Secretary on September 22. A meeting was held same day but no decision could not taken.

Sources said the state government is also considering DMRC model following an apprehension that private players might not turn up for such costly project when only eight months are left in ongoing regime of current government.