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With a nationalised bank and a French soft loan entity pledging to bankroll it, the Rs 5,200-crore Kochi Metro project has attained financial closure, putting the ambitious mass rapid transit system on track towards its 2017 deadline for starting operations.
The Delhi Metro Rail Corporation-supported Kochi Metro, whose work started in June, has tied up with its financial backers sooner than anticipated.
“We could reach this stage much before than (what we) expected,” Elias George, Managing Director of Kochi Metro Rail Ltd, told Business Line . “We are ahead of other metro projects in the country in attaining financial closure.”
George pointed out that Canara Bank alone had agreed to lend Rs 1,170 crore. The AFD — a French government-supported financial aid agency that supports infrastructure projects in developing countries — had committed a loan of €180 million (around Rs 1,525 crore) in quick time. “The AFD processed the loan application in just four-five months,” George said. “The agency was relatively new to India and they wanted to finish the process quickly.”
The State and the Union Governments have an equity participation of Rs 753 crore each. The sub-debt of the State Government would be over Rs 900 crore. The Japan International Cooperation Agency (JICA) had offered around Rs 1,000 crore as loan, but the process is not through yet.
“We might use the JICA loan for the second phase of the project,” George noted. “In fact, we have Rs 300 crore extra funds available now.”
The Kerala Government is expected to release Rs 230 crore as the first instalment of its equity portion soon and the Union Government will release its first tranche too. This will be followed by the AFD funding and the Canara Bank loan.
The 25-km metro rail with 22 stations that will serve two million people in and around Kochi is scheduled to be operational by 2017. Kochi is among the fastest growing tier-2 cities, along with Pune and Jaipur.
George pointed out that the Union Government had agreed to give funds from the Jawaharlal Nehru National Urban Renewal Mission to link Kochi’s waterways to the metro system. This would give last-mile connectivity to the metro users who could hop on to a boat from some of the metro stations.
As part of the Kochi Unified Metropolitan Transport Authority, the private and government bus services along with the metro would be integrated into a single command and control system. A single-ticketing system is on the anvil, too.
In order to make the metro commercially viable, George pointed out, two ‘cities within cities’ would be developed by the KMRL with large chunks of built-up area to be rented out. However, funds from these would be raised from the market, not from the government.
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