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Centre To Share Part of Cost of Private Firm Which Will Build The Ring Road Around The City

By Nishant, Section Roads in Kolkata
Posted on Tue Jun 17, 2008 at 04:48:04 AM EST

The state government has come to the aid of the private firm which will build the Ring Road around the city. It has decided to tag the project under a scheme which will enable the Centre to bear part of the cost.

Otherwise, the private firm would have had to bear the entire cost itself.

The state transport department has decided to tag the Ring Road project under the ‘viability gap funding’ scheme. This means that the Centre will be able to disburse funds under the head of cost of replacing utilities that are mandatory while implementing the project. Sources at Writers’ Buildings said that if the total project cost turns out to be Rs 4,500 crore, some Rs 1,200 crore would be generated from Central funds alone. The transport department has also extended the deadline for submitting tenders by the infrastructure companies from June 20 to July 31.

“By sharing the project cost, the private company would have to pay less. If they pay less, the public too has to pay less in terms of toll,” said a senior transport department official.

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Seven companies Tantia, Srei, Larsen & Toubro, the Bangkok-based Italian-Thai Development Public Company, the Hyderabad-based Nabojog Engineering Company, Hindusthan Construction Company and Gammon Infrastructure Private Limited — have been shortlisted for the final tenders.

The official said: “We are trying to tag the project under the ‘viability gap funding’ scheme, through which we can get funds from the Centre. We’ll have to explain how we’d shoulder the cost of replacing or removing utility services (such as telephone lines, tram lines, drainage and sewerage lines) which come in the way of the project’s implementation.”

A financial and feasibly study of the project will have to be prepared. “We’ll be able to send fresh financial details by the end of this month,” the official said. The official said sending the proposal to the Centre for sanctions under the scheme is perhaps the only option because the state treasury, already struggling with the limitations of the plan budget, could not share costs.

“We are buying time to prepare the proposal all over again so that we could seek funds under viability gap funding,” said transport secretary Sumantra Chowdhury.

Source: Ajanta Chakraborty From TNN 17/Jun/2008

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