Mobility hub toys with public-private partnership
October 21 2013 9:40 AM
This is all the more confounding as the society had decided to approach a consortium of banks a second time for funds at a meeting convened by chief minister Oommen Chandy in September. The first approval by the bank consortium had lapsed following delays in submitting the proposal.
In between, there was also a move to raise funds by including the project under the Jawaharlal Nehru National Urban Renewal Mission (JNNURM) scheme. The new twist in the tale has not been made official though the government expressed its helplessness in providing funds at the executive committee meeting of VMHS attended by top officials, including chief secretary E K Bharat Bhushan, in Thiruvananthapuram on Friday. The meeting, which was expected to approve pre-qualification tenders for the project, decided instead to reduce the project size.
According to top officials, the state government cannot shoulder the financial burden for the second phase given its current financial situation. "The cost of the first phase of the project was just Rs 15 crore while the estimated cost of the second phase is around Rs 430 crore. Given the current financial situation, it will be difficult for the state government to afford such a huge amount. So, we are trying to cut the project size,'' said E K Bharat Bhushan, who is also the chairman of the VMHS executive committee.
But at the earlier meeting, chief minister Oommen Chandy and his cabinet colleagues such as excise minister K Babu had objected to the move to downsize the project and decided to go ahead with the original seven-storey concept plan. There was a plan earlier too to reduce the project size to four storeys.
The chief minister had then promised to grant Rs 6 crore to VHMS immediately and Rs 50 crore next year.
He had also instructed top officials to ensure that the second phase of the project was completed simultaneously with the Kochi Metro rail project.
The Monday's executive committee meeting has now come a cropper as no approval was given to the pre-qualification tenders following government's reluctance to fund the project. The plan to start the construction work by January next year is in all likelihood to get delayed.
They will also have to hand over 25 acres of land and other infrastructure to the private partner till they recover the amount invested along with profit. Moreover, the suggestion has come when PPP projects are becoming less viable, according to some officials.
Hub in a fix
* Govt's empty coffers for VMHS to look at PPP route
* If they opt for PPP, the project will have to be redesigned, delaying the project further
* VMHS will have to hand over 25 acres of land and other infrastructure to the private party till they recover amount invested along with profit
* Meanwhile, a section of officials feel that PPP projects are becoming less viable
Courtesy: THE TIMES OF INDIA