Sep 5, 2016

Amaravati Metro drops JICA, teams up with DMRC

Amaravati: The Amaravati Metro Rail Corporation (AMRC) has opted out of the proposal to approach the Japanese International Cooperation Agency (JICA) for about Rs.3,500 crore loan after the Japanese agency put forth a fresh condition.

It instead signed an agreement with the Delhi Metro Rail Corporation (DMRC) on Monday for the execution of the metro rail project on a turnkey basis. “The agreement has been signed for a period of four years. By February 2019, we expect to put the priority corridor between Nidamanur and Pandit Nehru Bus Station into trial run operation,” AMRC Managing Director N. Ramakrishna Reddy told on Tuesday.
Mr. Reddy said release of funds to the tune of Rs. 300 crore by the State Government for land acquisition had given impetus for initiating the process of calling the tenders.

JICA conditions

JICA has so far been extending soft loans at around 0.3 per cent interest rate to cities like Chennai and Bengaluru without any conditions. This is called ‘untied’ loan which means that the receiving party can call for global tenders and procure various works without limiting to a particular country.

“Unfortunately, from this year onwards, JICA has made this soft loan as ‘tied’ loan insisting that 30 per cent of the loan component we receive must be utilised for procurement of rolling stocks from Japan only,” AMRC Managing Director N. Ramakrishna Reddy told on Tuesday.

There are other hassles as well. When the AMRC spelt out its plan to utilise the services of the Delhi Metro Rail Corporation (DMRC) as a servicing agency, the JICA put a condition that it would appoint a general consultant above the DMRC for supervision. “That will be a costly affair,” says Mr. Reddy.

He said the AMRC had appealed to the JICA to have a general consultant appointed with a limited role of supervision of quality works which had not been heeded to.

“I have been constantly in touch with the Director, JICA, Tokyo and Director, Ministry of Economy, Trade and Industry (METI), Japan from June 2 this year. In spite of repeated reminders, there is no proper response from their side. Since time is running out, we decided to drop JICA and go ahead with DMRC consultancy for execution of the project on a turnkey basis, duly utilising other external funding agencies,” said Mr. Reddy.