New financial models on table to make Lucknow Metro cheap

In the previous meeting,UP government had asked the DMRC to workout the financial models that could develop scope for development of project on PPP model.

To make the project attractive for private companies DMRC has now proposed to give advertisement rights and land parcel for commercial activities to the private developer. These sweeteners,sources said,will help the developer to recover its investment faster. The DMRC has also proposed that the state government will have to bear the construction cost of civil structures and let the private developer pay for installation of machinery and operation of the train.

“We calculated that hike in fare charges will not give any major relief to the developer but it will affect the the commuters. So it was better to give other facilities like land parcel and advertisement rights to the company,” said a DMRC official.

In the JBIC financial model,UP could take loan from the bank but in that case the Government of India will have to give guarantee for that.

In one another model,UP could share the cost of project with the Ministry of Urban Development. “The percentage of sharing will be finalised by both the parties after this model was accepted by UP,” said an official.

According to DMRC estimate,the Lucknow Metro project will cost Rs 12,671 crore — Rs 9,519 crore for construction and Rs 3,052 crore as escalation and Central taxes.

DMRC General Manager (Consultancy) SD Sharma said that these models have been framed were as per the requirement of the UP government. “We have sought a date from the UP government for presentation of these financial models next week,” Sharma said. He said that another model of Built,Operate and Transfer (BOT) will also be discussed in the next meeting.

The Lucknow Metro rail project includes three corridors — North-South,East-West and the Gomti Nagar link.