West Bengal Government to exit East-West corridor project
The Railways will now be in charge of the East-West Metro Corridor project in Kolkata. The Railway Ministry will own 74 per cent stake in the project, while the Urban Development Ministry will hold the rest.
The move signals the exit of the West Bengal Government from the project.
The process of initiating the share transfer from the State Government to the Railways was discussed in a meeting in Delhi on Thursday.
The proposal has already been approved by the Union Cabinet. Earlier, the corporation was equally owned by the Urban Development Ministry and State Government.
The Rs 4,874-crore project is already running one year behind its completion schedule of 2014-15. The metro corridor will connect the IT city Salt Lake with the western fringes.
The West Bengal Government has been in talks to offload its 50 per cent equity stake from Kolkata Metro Rail Corporation Ltd (KMRC) to the Railways for more than a year.
Incidentally, Railways completely owns the existing Kolkata Metro Rail system.
KMRC, a joint venture company formed by the Union Urban Development Ministry and Government of West Bengal, was in charge of executing the project.
Japan International Cooperation Agency (JICA), the senior-term debtor of the project, is funding 46.22 per cent (Rs 2,253 crore) of the project cost for the East West metro with a moratorium of 18 years.
With the change in ownership, the articles of association of the company will be modified and a new Board of Directors will be selected.
In fact, the Thursday meeting in Delhi was called by the Urban Development Ministry and had representation from the Railway Board.
The West Bengal Chief Secretary also took part. “A process to appoint a CEO will be initiated soon,” said a source.
The Japanese lending agency will be on the Board with the change in ownership. There was no discussion on change in route alignment. “A route alignment change is likely to delay the process,” the source said.
In June, Subrata Gupta, former managing director of KMRC, had told Business Line that 23 per cent of the project work was complete, including construction works on both elevated (6 km) and underground (9 km) portions.
On slow track?
However, sources in the State Government said the project has been on a slow track for quite some time over transferring of the State’s equity to the Railways.
The urban transit rail project had also faced opposition from its principal lender over realignment of its original route map, following land acquisition problems.