Delhi Metro's Phase-III proposed to be taken up in 2011-12

The construction of Delhi Metro's Phase-III, which envisages adding another 104 kms to the network in Delhi, is proposed to be taken up in 2011-12, the government announced today and alloted Rs 1351 crore as budgetary support for it.

With the Phase-II, that brought the Metro network in Delhi to about 200 kms, almost nearing its completion, the Government announced plans for the Phase-III for which the Delhi Metro has already prepared detailed project reports.

"In 2011-12, Delhi Metro Phase-III and Mumbai Metro Line III are proposed to be taken up," Finance Minister Pranab Mukherjee said in his budget speech in Lok Sabha.

While the Centre will infuse Rs 452.2 crore as equity to the Delhi Metro Rail Corporation, which it jointly owns with the Delhi Government, it will provide Rs 101.28 crore as grants.

Mukherjee also proposed allotment of Rs 1,351.86 crore as budgetary support to the Delhi Metro. The amount is likely to be used for the construction of the Phase-III.

Another Rs 650 crore is being proprosed as pass through assistance for the new age transport system, which has changed the way Delhiites travel.

The Phase-III project is currently being scrutinised by a Group of Ministers and the Planning Commission to decide the debt equity ration.

The decision on the funding pattern, which has been a contentious issue, is taking time. On February 14, the Delhi Metro had made a detailed presentation on Phase-III project to the Planning Commission.

While the Planning Commission wants the debt equity ratio to be increased to 50:50, sources said the Delhi Metro has expressed its reservations against such high equity investments by the Delhi and central governments.

The sources said the Delhi Metro has proposed a debt equity ratio of 40:60 under which the two governments will contribute 20% each and the rest of the amount is to be raised by loans from agencies like Japan International Cooperation Agency (JICA).

It is likely that a consensus will be achieved on a debt equity ratio of 40:60%. The ratio for first and second phases of Delhi Metro was 70:30%.

The Delhi Metro has proposed six corridors under the Phase-III plan to the Planning Commission.

The DPR was prepared by the DMRC last month after which it was decided to extend the Phase-III network to 105 kms. Lending agency JICA has also given positive indications to extend financial assistance to the project.

JICA has funded the Phase-I and Phase-II of the Delhi Metro and is also funding other Metro projects in the country.

The Delhi government has been trying to get the DDA to partly fund Phase-III but the efforts are understood to have not succeeded. The Planning Commission was also of the view that DDA should partly fund Phase-III so that the debt equity ratio can be reduced to 50:50.