News: Mumbai metro gets Finmin’s preliminary clearance

(TNN 26/07/2006) New Delhi - The Mumbai Metro Rail project, promoted by Reliance Energy Ltd (REL) and the Mumbai Metropolitan Region Development Authority, has got a preliminary clearance from the finance ministry.

The finance ministry is learnt to have found the project eligible for viability gap funding. However, for a formal decision, the finance ministry has today asked the urban development ministry for its comments on the concession agreement. Sources in Urban Development Ministry — the nodal authority for the project — have confirmed that it is reviewing the project and examining the cost structure.

REL maintains that the Mumbai project costs are not comparable with those of the Delhi Metro for several reasons: the Mumbai project is quite small covering about 12 km whereas the Delhi Metro runs to 65 km; the Delhi Metro was built with soft loans from the Japan Bank for International Co-operation while the Mumbai Metro has no such soft funding options, the Delhi Metro had the full backing of the government and the railways, while the Mumbai Metro lacks these.

A company spokesman also said that the Delhi Metro enjoyed tax benefits not available to the Mumbai project. Allowing for these factors, he maintained, the Mumbai project’s costs are comparable with those of Delhi Metro.