The government is planning to come up with a detailed Metro Rail policy modelled on the lines of the funding pattern of Delhi Metro Rail Corporation, which has proven to be a workable model.

The need for the new policy arose as the government found that the Viability Gap Funding (VGF) — in which the centre funds 20 per cent of the total project cost — and Public Private Partnership (PPP) models have failed to take off on expected lines. The policy will contain checks to prevent private developers from engaging in large-scale commercial development of property or assets which are primarily state-owned.

The policy, which is being deliberated upon by a committee of secretaries led by the cabinet secretary slated to meet in August this year, may be finalised in a couple of months. The urban development ministry is of the view that if possible, a PPP model should be explored. But if a PPP model is not possible and the city’s requirements justify development of a metro rail then the DMRC model may be followed. “The DMRC model may be followed if the resources are available, but states should not insist on a PPP model,” a top government official told The Indian Express.

With an oblique reference to the Hyderabad Metro project, which failed to achieve financial closure after a negative grant was quoted by MaytasInfra-led consortium, the official said that a metro project should not be turned into a property development project. “Property development or commercial exploitation of real estate can not be on such a huge scale. The project may have a provision for commercial real estate but that will depend on the characteristics of individual cities,” the official said.

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