RailEnquiry

The Bengal government's refusal to transfer its equity to the ministry of railways has lined up problems for the East-West Metro. The tiff between the UPA-run Centre and the Trinamool-run state government has also led to a loss of Rs 146 crore for the bankrupt Bengal.

The Centre has decided to convert the money contributed by Bengal into subordinate debt. So, the state government will be reimbursed only after the loan by Japan International Cooperation Agency (Jica) is repaid, 20 years from now.

The Japanese funding agency had promised to lend Rs 2,253 crore for the estimated Rs 4,874-crore East West Metro project. The loan once paid can't be repaid in the near future.

But the loss is greater for the East-West Metro project, which has run into severe funds crunch. Union urban development secretary and chairman, Kolkata Metro Railways Corporation Limited (KMRCL), said: "The situation is grave. We shall write to both the ministry of railways and the Bengal government to resolve the issue immediately so that the project can move."

According to the initial agreement, the Centre and the Bengal government would have together paid Rs 1,402.1 crore for the East-West Metro corridor, which will connect Howrah and Sealdah stations with the tracks crossing the Hooghly. By way of a Cabinet decision earlier this year, KMRCL is supposed to be run by the ministry of railways with the Bengal government giving up its 50% equity and the ministry of urban development (MoUD) transferring 24% of its 50% equity.

The arrangement took place at the behest of chief minister Mamata Banerjee whose party was then in charge of the railway ministry. As part of the UPA-II, Mamata had been desperate to transfer KMRCL to the railways since it would save the cash-strapped state exchequer from spending Rs 701.05 crore (50 % equity). But now with the Trinamool Congress out of the coalition at the Centre, the Mamata government seems in no hurry to effect the transfer - especially after learning that it would not get back the Rs 146 crore in the near future. It is dragging its feet on sending a formal letter to the ministry of railways for the handover.

In KMRCL's current state, the MoUD, which has already contributed Rs 234 crore or 16.64% of its equity, is unable to pay the rest of its equity money of Rs 130.32 crore. The MoUD is supposed to pay off the remaining equity share of 9.31% to KMRCL. And the ministry of railways is supposed to pay Rs 554.5 crore as contribution that was earlier earmarked for the Bengal government.

But the ministry, which only has the 24% equity (transferred by MoUD) at its disposal and is yet to get the rest of the 50% equity of KMRCL from the Bengal government, is unable to disburse funds. Consequently, no money is being released for carrying out the East-West Metro project.