To cast doubts that the PPP model (public-private partnership) would not succeed in Hyderabad project may not be valid and in any case the government did not have resources for funding such capital-intensive projects, the Commission said.

Trashing the DMRC chief’s arguments that the BOT route is expensive and would only benefit private parties and not the state, the Commission pointed out that indirect subsidies, a financial burden on the government, was more in case of the Delhi Metro model. It said that the Delhi Metro required an investment of Rs 10,000 crore from the exchequer whereas Hyderabad required no such investment.

“It is not correct that Delhi Metro is not putting a financial burden on the two governments. In fact it has received several benefits such as large waiver of taxes, duties, elimination of exchange rate risk on external loans¿ All these concessions to DMRC are actually costs to the government. Moreover, when replacements become due and loan repayments peak, the government may have to provide additional subsidy to Delhi Metro as well. If a true comparison is to be made then all these hidden subsidies must be evaluated and brought at par,” the Commission said.

The DMRC, sources said, has been extended long-term loan of approximately Rs 6800 crore for its first phase at less than 2 per cent interest, while its rolling stock and equipment have been excluded from customs and excise duties. Moreover, DMRC has been granted prime land in Delhi for the purpose of real estate development apart from the land made available for the project while no separate real estate has been made available in the case of the Hyderabad project. They have been allowed to exploit upper floors over maintenance depots for commercial use.

... contd.