Deputy Chief Minister of the state of Karnataka, DK Shivakumar has asked the Union government to change the funding formula for Metro rail projects, alleging that though they are supposed to be a collaborative effort between the Centre and the respective state governments, Karnataka has to pay over 80% of the overall cost.
A memorandum, which Shivakumar had submitted personally to Prime Minister Narendra Modi this Friday, sought equitable repartitioning of foreign loan liability repayment risks and Metro operating losses. He was also asking for project approval dates to be accelerated and cost estimates in particular cities.
The Karnataka government has urged the approval of the proposed 42-km double-decker Metro project in Bangalore city and the Sarjapur-Hebbal Metro project.
The Memorandum states that there is full cost sharing for land acquisition and utility relocation as well as 50% of the Central taxes and 100% of the State taxes. Karnataka also takes up repayment of foreign loans, and elevates project cost escalations to a considerable extent.
The total expenditure on the construction and functioning of Metro systems have, therefore, exceeded 80% of the financial requirement for the state, Shivakumar said.
He suggested a scheme for sharing the foreign exchange risk in external loans, as adopted in the Delhi Metro. The memorandum had further stipulated that the Union government shoulder some responsibility for operational losses of the Metro companies.
Shivakumar also called for the availability of easy and attractive home loans from national financial institutions and pointed out instances of central approvals being delayed and obsolete projections of project costs.
The Karnataka government told the Centre that the blame lay on it for the Metro systems serve the common people and it is time to share the responsibility of financing them in a more equitable manner.