Uncategorized

Vijayawada Metro | Center refuses to approve the Rs 6,847 crore for proposed metro

New Delhi: The Union finance ministry has refused to approve the Rs 6,847 crore proposed Vijayawada Metro Rail project till such time the Centre finalises the Metro rail policy while raising questions whether it is financially viable.

The Andhra Pradesh government is pushing for the Vijayawada Metro project, citing how the city is the gateway to the new capital of Amravati and is expected to see a spurt in population and traffic in the near future. Union urban development minister, M Venkaiah Naidu, who is from the state, is also batting for the project.

Government sources said that finance secretary Ashok Lavasa has raised “concern” over the low financial internal rate of return (FIRR) of the project. FIRR is largely based on cost and returns of the project.

The FIRR of the Vijayawada Metro is around 3%. Currently, metro projects are cleared if the FIRR is 8%,” said a finance ministry official.

The Vijayawada Metro proposal came up for approval on March 20 at the finance ministry’s Public Investment Board meeting.

It is only after the Public Investment Board – headed by the finance secretary – appraises and gives its green signal, that a project is placed before the cabinet for final approval.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s