Thiruvananthapuram & Kozhikode: No PPP mode for light metros

PPP model has failed in several metro projects including the phase 2 of Delhi Metro

A high-level meeting chaired by Kerala chief minister has rejected a proposal of the finance department to have private sector participation in the proposed light metro projects in Thiruvananthapuram and Kozhikode.

The Cabinet would soon take a final decision on this matter following the meeting’s recommendations. Chief minister Oommen Chandy said the Delhi Metro Rail Corporation (DMRC) would implement the proposed light metro rail projects in the two locations.

The meeting made it clear there would not be any private sector participation in the execution of these projects. Funding would be provided through financial support by the Centre, state government and through loan from agencies like Japan International Co-operation Agency (Jica).

Reiterating his earlier stand on the development of light metros without private participation, DMRC principal adviser E Sreedharan today said the public-private partnership (PPP) model was not suitable for the project, adding the PPP model had failed to take off in several of the metro projects, including Phase-II of the Delhi metro. “Everyone knows my stand on the project. There is no need to repeat it,” Sreedharan told mediapersons.

He also informed Chandy that 20 per cent of the project cost would be met by the Centre and Jica would extend the remaining part as loan at a nominal 0.5 per cent interest.

The debate over PPP model of execution intensified as the state finance department recommended only hybrid PPP model would be effective for implementing light metro rail projects. Finance minister KM Mani’s approach endorsing PPP had created a rift between the Kerala government and Sreedharan.  

Both the finance minister and his department are of the view that the private sector should be involved in setting up  signaling, running operations, and the role of the state government should be to provide basic facilities for these projects. According to the state finance department, the private partner should invest roughly Rs 2,600 crore in the project.

A section of the media even alleged the finance department’s approach on PPP was meant to include an Italian company in the development light metro projects. Earlier, in two rounds of meeting with the chief minister, Sreedharan had stuck to his stand on not allowing private players in light metro. This made the government on an embarrassing mode as allegations were raised against some ministers.

The chief minister rejected the proposal by the finance department as the government is on a tight spot as various allegations were leveled against some minister, including the finance minister.