Cost has gone up by Rs 7k cr in over 9 yrs

MUMBAI: With the PM inaugurating the first phase of the metro rail project in Mumbai on Wednesday, one can perhaps revisit an old report which has been gathering dust. It’s a techno-economic feasibility study of Mumbai metro done by Mumbai Metro Planning Group (MMPG) way back in ’97.

The MMPG study, done at the initiative of Tata Consultancy Services (TCS), had proposed construction of a seventh corridor, an entirely underground metro network that would lessen the strain on the suburban railway service.

The study, which was submitted by MMPG convenor PG Patankar to the then Sena-BJP government in June ’97, had pegged the cost of constructing the underground corridor at Rs 14,861 crore.

Compare this with the estimated total cost of Rs 20,000 crore for the three phases of Mumbai metro, and you get an idea of the spiralling construction costs and increasing traffic. Interestingly, the MMPG study had made a strong case for roping in private players in the project, given the magnitude of investment involved. Today, a consortium led by the Mumbai Metropolitan Region Development Authority (MMRDA) and Anil Dhirubhai Ambani Group (ADAG) is implementing the first phase of the metro.

The MMPG study, which was never accepted for implementation by successive governments, had envisaged a seven-year implementation plan according to which, ’05 would have been the first year of operation.

The study, even after factoring in the cost escalation during the seven-year implementation, had arrived at a figure of Rs 14,861 crore, assuming a 7% inflation, overheads, and interest on borrowings. Of Rs 14,861 crore, Rs 4,830 crore (32.5%) was supposed to come as equity, Rs 1,486 crore (10%) as government equity or grant, and Rs 8,545 crore (57.5%) as debt.