News: Mumbai Metro to lobby for Japanese loan
(TNN 02/04/2006) New Delhi - It’s Mumbai’s turn to press hard for securing Japanese soft loan for financing its ambitious metro rail project. Japan has already announced extending of loans to Bangalore Metro and the second phase of Delhi Metro.
In fact, Maharashtra chief minister Vilasrao Deshmukh may likely to visit Tokyo in the end of April to find ways to secure Japanese assistance to the project, Japanese government sources told ET. Significantly, Mumbai Metro’s proposed implementing mechanism of build-operate-and-transfer (BOT) may turn out to be a handicap because Japanese soft loans are not extended to private parties.
During his visit, Deshmukh is likely to woo Japanese investment in Maharashtra. However, discussions on possible Japanese ODA to Maharashtra may figure out prominently.
Recently, MD of Delhi Metro Rail Corporation E Sreedharan presented details of the first phase of the project to Deshmukh. Mumbai Metropolitan Region Development Authority (MMRDA), the implementing agency of the project, is proposing three metro lines — Colaba to Charkop, Versova to Ghatkopar and Bandra to Mankhurd — in the first phase of the project. The longest of the route, 38-km-long Colaba to Charkop may cost over Rs 8,500 cr.
MMRDA, however, says that the sources of the funding are not clear as yet. Also, it has not decided as yet that the BOT method will be applied to get funds. Deshmukh may try to convince Japanese government to modify its rules and allow soft loans to the project, which may be partially financed by private participation.
In fact, Japanese soft loan is preferred because of its low interest rates in comparison to other funding agencies like the Asian Development Bank. The interest rate for Japanese loan is as low as 1.3 per cent and the repayment period is 30 years, which at times are extendible. There is also a grace period of 10 years on repayment of infrastructure-related loans.
Japan had announced on Friday that the loan assistance to Delhi Metro would be Rs 566 cr for the coming financial year whereas it’s Rs 1699 cr for Bangalore Metro.
In fact, Maharashtra chief minister Vilasrao Deshmukh may likely to visit Tokyo in the end of April to find ways to secure Japanese assistance to the project, Japanese government sources told ET. Significantly, Mumbai Metro’s proposed implementing mechanism of build-operate-and-transfer (BOT) may turn out to be a handicap because Japanese soft loans are not extended to private parties.
During his visit, Deshmukh is likely to woo Japanese investment in Maharashtra. However, discussions on possible Japanese ODA to Maharashtra may figure out prominently.
Recently, MD of Delhi Metro Rail Corporation E Sreedharan presented details of the first phase of the project to Deshmukh. Mumbai Metropolitan Region Development Authority (MMRDA), the implementing agency of the project, is proposing three metro lines — Colaba to Charkop, Versova to Ghatkopar and Bandra to Mankhurd — in the first phase of the project. The longest of the route, 38-km-long Colaba to Charkop may cost over Rs 8,500 cr.
MMRDA, however, says that the sources of the funding are not clear as yet. Also, it has not decided as yet that the BOT method will be applied to get funds. Deshmukh may try to convince Japanese government to modify its rules and allow soft loans to the project, which may be partially financed by private participation.
In fact, Japanese soft loan is preferred because of its low interest rates in comparison to other funding agencies like the Asian Development Bank. The interest rate for Japanese loan is as low as 1.3 per cent and the repayment period is 30 years, which at times are extendible. There is also a grace period of 10 years on repayment of infrastructure-related loans.
Japan had announced on Friday that the loan assistance to Delhi Metro would be Rs 566 cr for the coming financial year whereas it’s Rs 1699 cr for Bangalore Metro.
posted by InCar Group Press Room at 23:26
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