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India : KERALA FINANCE DEPT. opposes funding model mooted by DELHI METRO RAIL CORP.
Publish Date : 03-Jul-2015
The Kerala Finance Department has opposed the funding model proposed by Delhi Metro Rail Corporation Ltd. to approach Japan International Cooperation Agency (JICA) to finance the Rs. 6,728 crore Light Metro for Thiruvananthapuram and Kozhikode with Special Terms for Economic Partnership (STEP) loan.
The Finance Department warned the Public Works Department (PWD) that accepting the procurement conditions for goods and services specified for JICA STEP loan would require the State to "purchase a sizable portion of the equipment from Japanese firms."
The Finance Department said, "For a major project of this nature, the dangers of agreeing to such a condition are evident. The State loses substantial control over prices and even quality and would be limited in its choices in selection, inviting price rigging, and potentially corrupt practices."
As the Cabinet is to take up the clearance of the DPR for clearance, the department's objections are significant.
The department noted that concurrence from the State Planning Board was needed for the project to seek the approval of the Department of Economic Affairs to avail the JICA loan.
The project or any component should not be started as the State cannot be saddled with the financial burden, unless the funding plan was finalised.
In its note on June 3, the department, said the opinions expressed by it and the Planning Board earlier had not been satisfactorily addressed.
