World Bank Hints At Reviving Aid For Second Phase Of Mumbai Urban

The World Bank has informed the Maharashtra government that there would be a case for revival of aid to the delayed Rs 3,500-crore second phase of the Mumbai Urban Transport Project (MUTP) provided a separate railway development corporation is formed at the earliest.

World bank officials have appreciated that revival of the MUTP-II is critical to resolve urban transport problems of Mumbai, but insisted on expeditious formation of a rail development corporation by the state and central governments before resumption of aid could be considered, principal secretary (urban development), K Nalinakshan told PTI in an interview here yesterday.

A World Bank team would arrive here next month for an informal overview of the project, to prepare the ground for a full-fledged mission some time in September, he said. Nalinakshan, who was in Washington recently on a goodwill mission to the World Bank, said an urgent meeting has been convened here on June 30 between the Railway Board chairman and the state chief secretary to discuss the modalities for forming the separate corporation and related issues.

 

Earlier this year, World Bank which is fund 70 per cent of the project cost, announced stoppage of aid as it perceived a lack of seriousness and commitment on the part of the Indian authorities.

I have shown world bank officials a copy of a letter written by the Maharashtra chief minister Manohar Joshi to the Prime Minister I K Gujral to convince them that the matter had been raised at the highest level, he said. Disputes, if any, between the state and central governments over the role and composition of the railway corporation, were expected to be sorted out at the June 30 meeting, the urban development secretary said.

Asked about the differences aired by the railway minister and the Maharashtra government over the reasons that prompted the World Bank to stop aid, he said those had been resolved.

The World Bank had also been sounded about the statement made by the Indian railway minister in parliament reiterating the government's commitment to the project, Nalinakshan said.

World Bank officials were apprised of the steps taken by the state government over the last three months to convince them that we are serious, he said.

These steps included formulation of a rehabilitation policy which the bank said should be implemented with the help of non-governmental organisations, he said, adding that the bank had also been told about measures for commercial exploitation of land.

Nalinakshan said the bank had been informed about the appointment of a core group to give a final shape to articles of association between the state government and the centre, which would share 30 per cent of the project cost on a fifty-fifty basis.

The cost of the second phase of the project, originally estimated at Rs 3,500 crore in 1995 had escalated to Rs 5,000 crore now.

As per the original cost estimate, the railway component was Rs 2,700 crore with non-rail component such as roads and bridges accounting for Rs 800 crore. (PTI)