Government had given green signal for Rs 3,000-crore first leg of the project in August 2010, but it is yet to kick off as investors find state guidelines 'unfriendly', demand inclusion of viability gap funding
The first phase of the Rs 3,000-crore monorail project, which got the green signal from the state government last year and was expected to be operational by 2012, is still stuck in its tracks.
The investors, who have termed the state guidelines for the project 'investor unfriendly', are now demanding inclusion of the Viability Gap Funding (VGF).
Bridging gaps: investors, who have termed the state guidelines for the
project 'investor unfriendly', are now demanding inclusion of the Viability
Gap Funding. VGF is usually provided to projects that are economically
justified but fall short of financial viability.
VGF is usually provided to projects that are economically justified but fall short of financial viability.
The 60 km monorail project will be executed under the Swiss Challenge method, in which a global tender is floated and anybody can challenge any component of the original proposal. So far, only one investor, Scomi-Geodesic, has come forward to execute the work on a 15-km monorail network, for which the tendering was to start in July, but the process has not happened yet.
"It is a simple policy matter that the investors have found not to be 'investor friendly.' We brought it up before the state government and after several discussions, they had agreed to give a decision on the matter in July.
But they haven't responded yet and we have not been able to organise a meeting with them," said Sumitra Iyengar, Director-Infrastructure, Geodesic Techniques Pvt. Ltd.
According to an official from the Infrastructure Development Department, investors are miffed with the fact that the government has chosen not to provide initial grants by way of VGF.
"The investors had asked for financial assistance to start the project, but the policy guidelines stated otherwise. A decision on the matter is expected soon," the official added.
The current cost estimate for the first phase is approximately Rs 2,500 crore, which is expected to go upto Rs 3,000 crore. As per the DPR, stakeholders were expecting to have one of monorail lines operational by 2012, which is unlikely.