Kerala CS Jiji Thomson points out flaws in Thiruvananthapuram Light Metro DPR

Kerala CS Jiji Thomson points out flaws in Thiruvananthapuram Light Metro DPR

Thiruvananthapuram (TVC): Weeks after state government overriding finance department’s objection over awarding light metro project on nomination basis to Delhi Metro Rail Corporation Limited (DMRC), chief secretary Jiji Thomson has made it clear that he had raised objections against the discrepancies in the detailed project report (DPR) submitted by DMRC.

The opposition of finance department and chief secretary are crucial as the government has recently taken an in-principle decision to award the project to DMRC.

Succumbing to DMRC’s pressure tactics, the state government had announced that it would not implement the project in Hybrid-PPP mode as proposed by finance department, instead go for JICA loan. The CM had also said that the project will be implemented by DMRC itself. Though DMRC’s immediate demand was to approve the DPR, the state government is yet to take decision on it.

Speaking on the sidelines of a meet the press at Press Club, Jiji Thomson admitted that he had pointed out flaws in DPR. Ironically, Thomson is facing corruption charges in Palmolein case even after making specific remarks against the deal. On the light metro project, most officials, including chief secretary and finance secretary, have submitted reports against awarding project on nomination basis to DMRC.

Not just officials here, Union government has also issued specific warning against use of JICA loans for metro projects. “Availing JICA loans under STEP conditionality will not be in the interest of metro rail projects as the competition will be restricted and it will also affect indigenous manufacturing as step conditionality require import of goods from Japan to the extent of 30% of the project cost,” a circular issued by department of economic affairs (DEA) to central and state government departments said.

The circular also made it clear that the interest may not be as low as claimed by DMRC. “Due to exchange rate fluctuations, it has been found that rupee has depreciated against Yen on an average rate of 9.5% in the last 40 years, at the rate of 5.7% in the last 10 years and at the rate of 11.2% in the last five years. In the event that the exchange rate fluctuations are passed on to SPVs executing the metro rail projects, the project may not be viable with JICA loans as the SPVs have no earning and also have no control over exchange rate fluctuations,” the DEA has warned.

Earlier, Union minister for urban development Venkaiah Naidu had also asked chief minister to utilize PPP mode for metro projects. Meanwhile, the cabinet is unlikely to consider light metro project on Wenesday.