Title - State dumps fuel cess as means to finance metro

PUNE: The state government will not impose cess on the sale of petrol and diesel in the city to raise funds for the Pune Metro project.Chief minister Prithviraj Chavan convened a meeting of the Pune Municipal Corporation (PMC) and the state urban development department officials on Tuesday. The project was discussed with the finance department on Wednesday. The project's proposal is likely to be tabled before the state cabinet next month.The project for Pune and Pimpri Chinchwad includes two routes with a total length of 31.5 km. The first route is between Vanaz and Ramwadi in Pune and the second route is between Pimpri Chinchwad and Swargate. As per the revised costs in 2013, the metro rail project will cost Rs 10,183 crore."The state government is discussing the financial model for the project. Earlier, the government was mulling a metro cess on the sale of petrol and diesel in the city. However, in the view of the public indignation against inflation and constant rise in fuel prices, the state has decided shelve this option," a senior state government official said.Tax on commercial vehicles entering Pune metropolitan area and levy of additional charges on new registration of vehicles is being considered. "There are suggestions of a green cess on existing vehicles. But these options to raise funds may also run into opposition. The state and the PMC have to look for options that will go down well with citizens," he added.

Finance department officials have already raised questions over the financial model and have suggested that the municipal corporation's share in the metro be hiked to 20% from the existing 10% of the total project cost, while the state and the centre chip in 20% each. The remaining should be raised via a Special Purpose Vehicle (SPV), they said.

An increased floor space index along the metro corridors is among the sources the state is looking for implementation of the project along with property development on government land, the government official said.