Plan panel, railways clash over Delhi station upgrade

The Rs 12,000-crore modernisation of the New Delhi railway station through public-private partnership (PPP) has hit a roadblock as the railway ministry and the Planning Commission have floated different Model Concession Agreements (MCAs) for the project.

Informed sources said the two MCAs were likely to be very different, though their contents could not be verified. The MCA is intended to reduce transaction cost, ensure transparency in the bidding process and create a stable and predictable business environment.

The initial bidding process has already been delayed as the new request-for-qualification (RFQ) document floated by the railway ministry is awaiting final clearance from the finance ministry. The last date for submitting the RFQ document has been extended to February 5 from January 20. Now, with the railway ministry and Planning Commission gearing up for a showdown, infrastructure developers fear the project could be delayed further.

The Planning Commission-drafted MCA has been put up for discussion among various stakeholders, including the railway ministry, financial institutions, law firms and infrastructure developers. Once approved, it will be applicable for the 26 stations the Railways want to modernise through the PPP route.

Not to be left behind, the Railways have worked on its own MCA and are certainly not in favour of adopting the Planning Commission document. The draft model agreement developed by the Railways is currently being internally discussed by the Railway Board. Once cleared, the agreement will have to get final approval from an inter-ministerial group.

“The power to prepare the MCA in a PPP project lies with the administrative ministry under which the plan is implemented. When we are awarding the contract and entering into a concession agreement with a private infrastructure developer, why can’t we develop our own MCA,” asked a senior railway ministry official.
 

NEW DELHI RAILWAY STATION MODERNISATION PROGRAMME
October 2007	Government invites request for qualification from interested companies
July 2008	Scheduled time for awarding the contract
October 2008	Government scraps the request for qualification and floats a fresh one
January 20, 2008	last date for submission of request for qualification (extended to February 5, 2009)

But the Planning Commission has already circulated its MCA to various stakeholders for comments and suggestions. To deliberate on the issues arising from the draft agreement, a meeting was held under the chairmanship of Gajendra Haldea, the advisor to Planning Commission Deputy Chairman Montek Singh Ahluwalia.

The meeting was attended by senior railway ministry officials, leading banks and financial institutions like State Bank of India and IDBI, and leading infrastructure developers like DB Realty Ltd, TRIF Infra Assets Ltd, L&T, GVK Development Projects Pvt Ltd, KMC Infratech Ltd and DSC Ltd.