|The Mumbai Metro Rail Corporation (MMRC) has written to the government, conveying a delay of six months in completion of the Metro 3 corridor. The Colaba-Bandra-SEEPZ corridor will now begin operations only by June 2021 instead of the proposed December 2020. The delay also means a loss of Rs. 4.25 crore per day, which means a total cost overrun of Rs. 765 crore.|
“We have written to both the Centre and the State about the delay in completion of the project and the expenses involved. However, we will try to make up for the time lost as far as possible,” said S K Gupta, Director (Projects), MMRC.
According to sources, several factors have contributed to the delay in the project including the rehabilitation of project affected persons (PAP), utility shifting, a three-month stay by the High Court on tree cutting last year and a stay by the court for construction activities during the night. “It has set us back by a few months. We hope to make up for the delay as we go ahead,” he said.
The Rs 765 crore loss also includes a loss of revenue, both fare and non-fare, of Rs 55 lakh per day that the Metro should have garnered if it was in operation. Apart from that, the amount includes the escalation cost to be paid to the contractor for the delay, the loan component, the General Consultants payment and the operations of the organisation.
“Apart from the Rs. 4.25 crores we are losing everyday there are other indirect expenses. For example the Metro will take 4.5 lakh vehicles off the road and should be saving around Rs 1.5 crore for the fuel. This is an additional expense to the exchequer which could be saved,” added Gupta.
According to the Detailed Project Report (DPR) of the corridor the Economic Internal Rate of Return (EIRR) for the project has then been calculated at 17.93 per cent. “This means for the investment of Rs. 23,000 crore, the society gets economic returns of 18 per cent. But this has not been included in our estimation of loss,” he added.
The EIRR is calculated after evaluating the tangible benefits provided by the Metro corridor like fuel saving, reduced pollution related health benefits and the time saved.
THE INDIAN EXPRESS