Metro may cost more
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02/06/2008
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Deccan Chronicle (Hyderabad)
The state government is under pressure to increase the project cost of metro rail from the present Rs 9,696 crore. The bidders, who were short-listed after technical scrutiny, made it clear that the project cost was financially unviable. Accordingly, the government is believed to have decided to extend the deadline of June 20 for submission of financial bids for a rethink on the project cost. There were also apprehension over the quality of infrastructure and mechanical components, including rolling stock and coaches, to be used in the project. While some companies tied up directly with the manufacturers, some formed joint venture only with the operators of metro rail or big construction companies, which do not have experience in building metro rail projects. After technical scrutiny, five consortia were short listed of which the GVK group tied up with Alstom (France), Reliance with Bombardier (Canada) and NCC with Siemens (Germany). The foreign partners in two other JVs, led by Maytas and Essar, are ItalThai and Singapore Metro respectively. The officials were worried about the use of low quality material, particularly in the coaches made of aluminium. The developer was asked to chose between steel and aluminium and no company had so far made its choice known to the government. "While coaches made of steel are in use for a long time and are standardised, the use of aluminum is a relatively new concept and we need to be careful in this aspect. That is why we have included strict norms in the manual of specification standards," the official said. The quality should not be compromised in whichever form the joint venture might be, the official added. Meanwhile, to make the project viable, the government was asked to chose either extending the lease period to 99 years or increasing the extent of land to be given to the developer for commercial use to recover the cost. Sources, however, said the guidelines of the centre would not permit lease for more than 60 years. The state government had to follow the Centre's guidelines to get the 30 per cent viability gap funding for the project.