Centre adding burden to AP’s shrunken shoulders!

Delhi Metro Rail Corporation besides submitting the Detailed Project Report for Vijayawada Metro, also suggested ways to bring in money for the project as the cash strapped state could not fund it. The DMRC suggested levying to impose additional cess/surcharges to fill the viability gap. According to the state reorganization act, the center had to fund these metro rail projects in Vijayawada and Visakhapatnam, but the Union urban development ministry cleverly escaped from the burden by routing its intentions through DPR.

[m9ad]

According to the proposals, the Center will only fund 20% of the project costs while the state had to pool in another 20% and the remaining through loans. The state government was planning to pressurize the center to take up the grant of at least 50 percent of the cost but the unwanted suggestion of DMRC may corner them.

The state government with a deficit budget can not afford this 20% or acquire the loans worth 3800 Crore from market which will only burden the cash strapped state. Also, the DPR also stated that the Rate of Return (profitability margin) of Vijayawada metro would be just around 3.07 percent against the minimum requirement of 16-20 percent. Experts say Vijayawada may not afford the construction as well as the after operations maintenance with the present state condition.