Metro rail to have new funding structure

Planning commission deputy chairman Montek Singh Ahluwalia on Wednesday asked Karnataka to reply to clarifications sought by the Union urban development ministry on the National Urban Renewal Mission, as the state has submitted a proposal seeking Rs 10,779 crore assistance.

"I have suggested to the state government that they should ensure expeditious clarifications to urban development ministry on the doubts raised by it", he told reporters after a meeting with Karnataka chief minister N Dharam Singh here.

Describing Singh's presentation on infrastructure projects implemented and proposed by the state government as "very fruitful", Ahluwalia said he would also speak to the urban development ministry to clear projects proposed by the state.

Agreeing with Singh's contention that Karnataka had large infrastructure requirements, particularly Bangalore city, he assured that the state's request for certain concession in duties and more funds would be considered.

He said the state has implemented several infrastructure projects and that he was impressed by the performance in some sectors, especially in electricity distribution, where the government had brought down transmission and distribution losses.

"The achievements of Karnataka are noteworthy and worth emulating by other states", he said.

On the metro rail project, Ahluwalia said it was in the final stages of approval under a new policy framework and indicated that the funding was unlikely to be on the model of the Delhi project, which he described as an "old pattern".

Speaking in favour of Metro rail, a project on which the government's coalition partner JD-S has some reservations, Ahluwalia said: "if the project is implemented speedily, it will unfold a big change in infrastructure facilities in Bangalore.

"I feel the Metro rail, which has logical technology, is a good project and the Centre would support it."

Singh said he has requested Ahluwalia for time till January for the state to commence negotiations on its plan size.

Since the Panchayat polls are to be held next month, it would not be possible for him to attend the Planning Commission meeting to finalise the state's plan size till January, the chief minister said.

Singh, in his presentation, briefed Ahluwalia on the infrastructure projects implemented by the coalition government in the last 18 months and those proposed during the next 12 months, besides seeking at least 50 per cent of the cost of these projects be shared by the Centre.

He urged the Centre to grant full exemption of customs and central excise duty for the Metro rail project to reduce the project cost and increased Central contribution, from 20 per cent to 25 per cent.

The Centre, as promoter, should also meet the cost escalation equally with the state, Singh said.