BJP keen on PPP model for Metro projects

The first Metro line in the city was constructed on a public private partnership model.

Written by MANASI PHADKE | Mumbai | Updated: July 11, 2014 8:47:53 am
metro The state government has resolved to largely refrain from PPP for future projects after a shaky experience with the city’s first Metro. (Source: Express archive)

Even as the Congress-NCP state government has resolved to largely refrain from Public Private Partnerships (PPP) for Mumbai’s future Metro rail projects after a shaky experience with the city’s first Metro, the local BJP leadership, toeing the Modi government’s line, is strongly vouching for PPPs.

In his maiden budget speech, Finance Minister Arun Jaitley said the government would encourage development of Metro rails on a PPP basis and the Union government would support these projects through viability gap funding.  Jaitley has also allocated Rs 500 crore to set up an institution to provide support for mainstreaming PPPs.

Vinod Tawde, leader of opposition in the legislative council, said, “Though all future Metro projects in Mumbai are planned on a cash contract basis, they can be considered on a PPP model. If our government comes to power after the assembly elections, we will actively consider PPPs for Metro projects.”

The first Metro line in the city — the 11.4-km Versova-Andheri-Ghatkopar Metro — was constructed on a public private partnership model. However, the state government and the Reliance Infrastructure-led Mumbai Metro One Pvt Ltd (MMOPL) are now locked in litigation due to a dispute over the cost escalation and tariff fixation. This was also the first Metro in the country to be constructed on a PPP model.

With the experience of this east-west Metro corridor fresh, the Congress-NCP-led Democratic Front government in Maharashtra has planned to construct the other lines-the Colaba-Bandra-Seepz Metro and the Wadala-Thane-Kasarvadavali corridor-on a cash contract basis. The government had earlier bid out the Charkop-Bandra-Mankhurd Metro, which has remained a non-starter, on a public private partnership. However, it is now keen on terminating this agreement and constructing the line as a cash contract.

UPS Madan, metropolitan commissioner at MMRDA, had said the government is at present not keen on opting for PPPs in Metro or public transport projects.

Ashish Shelar, who heads the BJP’s Mumbai unit, said, “There is no choice but to look at PPPs. On its own the government does not have so much money that it can implement all future Metro projects on cash contracts. What happened with the Mumbai Metro was not because it was on a PPP model. It was because of the way the agreement was drafted and the change of laws midway.”

Shelar added that it is too early to say what the BJP will do with the existing Metro rail plans if elected to form a government at the state level. However, he said with a proper framework for PPPs, which the Union government is trying to bring in, the model should work.

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