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  • Plan changes, expensive raw material to push Delhi Metro phase III cost by 30%

Plan changes, expensive raw material to push Delhi Metro phase III cost by 30%

CommonFloor Editorial Team

A cost escalation of over Rs. 10,000 crore is expected to be witnessed for the completion of the third phase of Delhi Metro, as per the reports by Japan International Cooperation Agency (JICA), which is the primary funding and advisory partner of DMRC.

Sharp increase of material prices and changes made in some of the corridors in favour of underground sections from elevated lines, are the main reasons quoted behind the price escalation.

Role of Japan International Cooperation Agency (JICA)

As per market reports, half of the construction cost would be covered by JICA. About Rs. 8000 crore has already been provided by the Agency as a soft loan to the Delhi Metro Phase III project. A further funding of about Rs. 15,770 crore is likely to be done by JICA, which would be provided in two equal tranches. The Agency’s exposure to the project would thus increase by more than 25%.

JICA has played a major role in the development of Phase I and II of the Delhi metro, by funding over half of the construction cost involved. The same is expected for the Phase III project too.

Phase III of Delhi Metro would cover a length of about 112 km, and would have 4 corridors as mentioned below :
1. Mukundpur to Yamuna Vihar – 35 stations
2. Janakpuri to Kalindi Kunj – 22 stations
3. Central Secratariat to Kashmiri Gate – 7 stations
4. Jahangirpuri to Badli – 3 stations

Soft loans of more than Rs. 23,670 crores has been already provided by the JICA towards the Delhi Metro Phase I & II. The loans have a repayment period of about 30 years, with interest rates varying from 1.2 and 2.4%. The expected loan size for Delhi Metro Phase III is higher than the first two phases combined, as it covers a length of about 112km while the previous phases had a combined length of 190km.

The Japan International Cooperation Agency plays a very major role in our country’s development finance programmes. India has taken a loan of about 3.6 trillion yen from the agency, since 1958. In addition to the Metro Rail Project in Delhi, JICA is also financing urban metro projects in metropolitan cities like Mumbai, Chennai, Bangalore and Kolkata too. In Fiscal Year 2013, it saw loan commitments from India rising as high as about 348 billion yen.

Project Cost

As per the EIA for Phase III Corridors of Delhi Metro, the capital construction cost of the 4 corridors in the third phase of Delhi Metro had been estimated to be Rs. 27,308 crores (` 273.08 billion) without taxes and duties. Taxes and Duties such as Custom Duty, Excise Duty, Sales Tax/VAT etc had been estimated to be Rs. 4,649 Crores (` 46.49 billion). The total estimated cost was ` 31957 crores (319.57 billion).

At January 2011 price level, the project cost covered civil, electrical, signalling and telecommunication work, rolling stock, environmental protection and rehabilitation.

However, with the rise of material cost and changes in the construction plan, the total construction cost is estimated to cross Rs. 45,435 crores, with an increase of more than Rs. 10,000 crores in the capital cost.

Tags : Custom Duty delhi metro delhi metro phase iii project delhi metro phase iii route delhi metro phase iii stations JICA phase iii of delhi metro project costing protection rehabilitation

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