RailEnquiry

KOLKATA: The ambitious Rs 4,874-crore East-West Metro has gone into a limbo because the Bengal government is yet to transfer its 50% equity in the company set up to implement the project to the railway ministry. The Kolkata Metro Railway Corporation Limited (KMRCL) was set up as a special purpose vehicle of the Bengal government and the Centre to implement the project.The Centre-nominated KMRCL director, S K Lohia, also a joint secretary in the Union ministry of urban development (MoUD), told TOI: "The project is badly-hit because the outgoing project promoter (Bengal government) can no longer take decisions. Why don't you ask your state government why it is still holding back its shares? Why isn't the simple two-line letter required to transfer its shares in the company not being issued?"While in UPA-II, Mamata Banerjee was desperate to transfer KMRCL to the railways as it would have shifted the burden of funding the project from her cash-strapped government. With the railways holding majority share in KMRCL (50% transferred by Bengal and 24% by the MoUD), the project would still be her baby while being 100% centrally-funded. But with Trinamool no longer a part of the ruling coalition, Bengal is sitting on the share transfer. As a result, work on the project has come to a halt.When contacted, transport minister Madan Mitra said, "It's difficult to comment on the matter off-hand."

Share transfer needs legal vetting: State

The Union cabinet had approved the handover of the project on August 23 at the behest of Mamata, whose government would have got back the Rs 146.5 crore it had contributed and also been spared from coughing up the remaining Rs 554.5 crore.

It was decided that the urban development ministry would retain 26% of its original 50% in KMRCL. The remaining 24% equity would be with the railways, whose share would go up 74%. Following the cabinet decision, the ministry gave up its 24%, but Bengal held on to its 50%.

An extraordinary general meeting was called by the KMRCL board last month at which board members nominated by the Bengal government (MD B P Gopalika and director J K Saha) said that the state had made no formal communication to KMRCL regarding transfer of equity.

This, despite a letter dated February 8, 2012, by Bengal based on the cabinet note by the railway ministry. The state-nominated members insisted that Bengal government's equity couldn't be transferred without the amendments to the Articles of Association.

The Centre does not buy the logic. According to documents available with TOI, KMRCL chairman Sudhir Krishna notes, "Chaotic system is prevailing ... The unprofessional approach by those who are not responsible has led to project timelines slipping badly." Another reads: "The board should approve immediate transfer of 100% equity holding of Bengal government

KMRCL director Lohia said, "In Bengal's interest, the people concerned should act immediately. The East-West Metro is vital for Kolkata which has only 6 % road-space." Transport secretary and MD, KMRCL, B P Gopalika said, "We are waiting for a letter from the railways."

But documents prove that the railways had already sent the letter.