State nod to MoU for Nagpur Metro Phase-II

 

 

 

In a huge relief to Maharashtra Metro Rail Corporation Limited (MMRCL), a major obstacle in Phase-II of Nagpur Metro was cleared after Maharashtra Government’s nod to sign a tripartite agreement for the construction of a new corridor. The 43.8 km-long corridor will have 32 stations. A memorandum of understanding (MoU) will be signed, which is mandatory in the process of sourcing funds from external agencies. The second phase is to be completed within a period of five-years from the date of signing of the agreement. Post that Maha Metro will be able to unlock the sanctioned funds from European Union Bank and other international lenders. Although the date for signing of MoU is not yet determined, now that the State Government has granted the clearance, the Board of Directors of MMRCL would co-ordinate with others to secure funding of Rs 6,708 crore for extension project of Nagpur Metro. Meanwhile, to cut down the delay that is inevitable during processing of administrative works, Maha Metro has already completed basic negotiations to ensure deadline is met with.

 

 

 

The tender process requires nearly three months, and hence most of the technical bids for future contracts have been examined and firms also ranked accordingly. The Urban Development Department (UDD) also released the gist of the MoU that is to be signed formally between MMRCL, Government of Maharashtra and Government of India. The draft of MoU was pending for approval since long with UDD as it was under minute scrutiny by legal experts and officials familiar with lending agencies’ working pattern. The Phase-I of Nagpur Metro spans 40.02 km and has 32 stations dotted on two lines, Aqua and Orange, both of which are going to be extended further with plan to cover the Nagpur Metropolitan periphery. Central Government has given approval to Phase-II of Nagpur Metro at its cabinet meeting held on December 29, 2022. Thereafter, Maharashtra Government gave its nod to financial and technical aspects of the Nagpur Metro's extension. The UDD permission for MoU was vetted by Central Government and communicated to State Government on January 16, 2023. As per the notification of September 22, 2023, in case there is escalation in cost of Phase-II then same should have sanction from Finance Department of State Government and also viability gap funding should be arranged from Dedicated Urban Transport Fund.

 

The second phase of Nagpur Metro envisages connecting Kanhan, Kapsi, Kamptee, Butibori, Hingna, the satellite townships, with commercial and residential parts of city. The MoU details the allocation to various components, including alignment and formation, station buildings, depots, traction and power supply, signalling and telecom and other allied items. In the project financial, the MoU outlines the contribution from GoI and GoM will be Rs. 1310 crores respectively and same would be done through a mix of equity, interest free sub-ordinate debt and senior term debt/Pass Through Assistance (PTA), this includes borrowing from bilateral agencies. The PTA component would be Rs. 3585.60 crores.