No clear picture on tapping Metro sections to reduce VGF

The preliminary report on the commercial exploitation of the underground section of the third Metro rail corridor in the city has been submitted to Mumbai Metropolitan Region Development Authority.

The preliminary report on the commercial exploitation of the underground section of the third Metro rail corridor in the city has been submitted to Mumbai Metropolitan Region Development Authority. However,the report fails to give a clear picture on the precise extent to which the Viability Gap Fund (VGF) for the corridor can be reduced by commercial utilisation of space in the underground stations.

The nodal agency has asked consultants Louis Berger to study deeper and come up with a clearer assessment. According to Metropolitan Commissioner Ratnakar Gaikwad,a clear estimate would help them assess the costs for the project. They have taken three scenarios-optimistic,realistic and worse-to determine figures of earnings by commercialising the underground stations which gives us a range from Rs 500 crore to Rs 2,200 crore. We understand no such study can be accurate; there is around five to 10 per cent variation but we need a realistic assessment to arrive at a proper costing for the corridor, Gaikwad told Newsline .

With the MMRDA looking to issue the Letter of Intent (LoI) for the third corridor by December-end,the delay in getting the accurate figures through the study would take an additional month. The final report is expected in a months time, Gaikwad added. The study is crucial to the quick processing of the corridor as it would determine the implementation model-either public-private partnership or the Delhi-Airport model with Union Urban Development Ministrys funds.

The MMRDA has decided to extend the third Metro corridor from Bandra to Airport via Bandra Kurla Complex. The 30-km corridor is estimated to cost around Rs 15,000 crore with two underground sections-Colaba to Mahalaxmi and BKC to Airport.

The Viability Gap Fund on the corridor is expected to be over Rs 10,000 crore. The MMRDA had planned to exploit the underground sections as it may bring the VGF down by an estimated 40 per cent. MMRDA officials added that cities like Tokyo,Toronto,Singapore have had good integrated development in the station areas with highly successful commercial exploitation.

The MMRDA would also be commercially exploiting space over 27 stations on the Charkop-Bandra-Mankhurd route. Around 4,000 sq meters would be set apart at each station,which is substantial space to house offices,shops,etc. Even in the first metro corridor the MMRDA has earmarked around 1,000 sq ft at station for commercial exploitation on concourse level.

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