Loan sanctioned for Pune Metro

AIIB and World Bank to give Rs 6,325 crore loan for Pune Metro; loan process to be completed in a couple of weeks before work begins

Asian Infrastructure Investment Bank (AIIB) and World Bank have agreed to give a loan of Rs 6,325.50 crore for the Pune Mahanagar Metro Rail Project Phase I. Department of Economic Affairs (DEA) of Ministry of Finance, Government of India, on September 14, signed the proposal to give a loan to Pune Metro with AIIB and World Bank. The loan process will be done in the next couple of weeks before the actual work of Pune Metro begins.

The Metro will go a long way in improving the public transport situation of Pune and Pimpri-Chinchwad.

DEA signed the loan agreement with AIIB and World Bank of Rs 6,325.50 crore recently for the Pune Metro project. The screening committee of DEA of the Government of India, in the meeting held on July 28, 2016, had approved a proposal of the Government of Maharashtra forwarded by the Ministry of Urban Development for multilateral assistance of Rs 6,325.50 crore for the Pune Metro Rail Project Phase I, on the condition that the loan will be directly taken by Special Purpose Vehicle (SPV) made by Pune Municipal Corporation (PMC) to look after the Pune Metro Rail Project with sovereign guarantee being provided by the Government of India. The loan will be co-financed by the World Bank and AIIB and it will be split in three tranches.

Pune Guardian Minister Girish Bapat said, “For speedy procedure of Pune Metro, Maharashtra government constituted the committee under me, to strengthen the public transport of city. The report which our committee made, the state government made proposal and forwarded to the central government. Union finance minister Arun Jaitley and urban development minister Venkaiah Naidu passed the file to give loan to Pune Metro Rail Project from AIIB and World Bank, for which central government provided guarantee. This loan will be taken on account of SPV set up for Pune Metro project. In the next couple of days, the finance ministry will organise meetings and will do an agreement with AIIB and World Bank regarding the loan procedure to clear loan for Pune Metro project. For that I will go to New Delhi for next procedure. State government will contribute Rs 2,460.40 crore, central government will contribute Rs 2,118 crore, and the municipal corporations of Pune and Pimpri-Chinchwad will contribute Rs 1,278.10 crore of total expenditure of the Pune Metro Rail Project.”

PMC Commissioner Kunal Kumar said, “We did the Pune Metro rail proposed project presentation at DEA a couple of weeks ago. On the basis of proposed metro rail project, we need 50 per cent loan of total amount of project from financing agencies. AIIB and World Bank on guarantee of Government of India agreed to give loan of Rs 6,325.50 crore for Pune Metro Rail Project work. Very soon we will hold meetings with representatives of AIIB and World Bank to make a feasibility report and pre-loan signing formalities will be completed. In the coming three months, we will be able to sign loan agreement procedure with AIIB and World Bank. This is how we are able to generate 50 per cent amount of Pune Metro project which we have to raise from the market. Central government will contribute 30 per cent amount of total expenditure of Pune Metro, 20 per cent amount will be contributed by state government, and ten per cent amount of total expenditure of Pune Metro will be contributed by both Pune and Pimpri-Chinchwad municipal corporations. We have started the procedure of doing loan agreement and in the next 2–3 weeks we will organise meetings with the representatives of AIIB and World Bank.”

tushar.rupanavar@ goldensparrow.com

Originally published on The Golden Sparrow