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A Central government panel has given final approval for viability gap funding of ₹1,224.80 crore to Pune Metro Line III being built by Tata and Siemens consortium on a public-private-partnership mode.
The 23.20-km- line connecting Maan (Hinjawadi) and Civil Court (Shivaji Nagar) is being built at a cost of ₹7,420.31 crore on a design, build, finance, operate and transfer (DBFOT) basis for a 35-year concession extendable by 25 years.
The Centre will share ₹1,224.80 crore of the total viability gap funding of ₹2,351 crore sought by the Tata-Siemens consortium as grant for the project. The balance VGF of ₹1,126.20 crore will be borne by the Maharashtra government.
The consortium, a lone bidder, had sought a VGF of ₹2,351 crore, about 40 per cent of the total project cost estimated initially at ₹6,124 crore. The project cost has since been revised to ₹7,420.31 crore.
“The Empowered Committee unanimously recommended to the Finance Minister the final approval of VGF support under the scheme for financial support to PPPs in infrastructure to the project proposal of Pune Metro Line-III on PPP mode submitted by Pune Metropolitan Region Development Authority,” according to a government document seen by BusinessLine .
The final approval for the VGF granted by an Empowered Committee led by Ajay Seth, Secretary, Economic Affairs, will have to be signed off by the Finance Minister Nirmala Sitharaman. The recommendation of the Empowered Committee for VGF of more than ₹200 crore needs approval from the Finance Minister, according to the VGF guidelines for financial support to PPPs in infrastructure sector.
The project is being implemented by Pune IT City Metro Rail Ltd, a special purpose vehicle formed by TRIL Urban Transport Pvt Ltd (a unit of Tata Realty and Infrastructure Ltd) and Siemens Project Ventures GmbH.
The Tata-Siemens consortium has given an undertaking that it will abide by the pre-fixed initial tariff outlined in the concession agreement to set the fares and the subsequent escalation mechanism without seeking recourse to a Fare Fixation Committee under Section 34 of Metro Railways (Operation and Maintenance) Act, 2002.
The Maharashtra government has also given a letter confirming that it will not request the Central government to constitute a Fare Fixation Committee for the project and will honour the fare fixation formula stipulated in the concession agreement, according to the document.
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