The Delhi Metro Rail Corporation (DMRC) is looking at a project cost overrun for the first time since its inception.
Not surprisingly, one of the reasons cited is inflation. The 140-km Phase 3 project is already running behind schedule and if the DMRC fails to meet its March 2016 deadline, the cost may escalate further, say sources. This may further impact funding.
The budgeted cost of Phase 3 of the Delhi Metro was approximately Rs. 35,000 crore. It has now increased by about 10%. “This is due to the addition of some corridors in the original plan and a steep rise in the cost of raw materials,” said Anuj Dayal, chief spokesperson, DMRC.
Japan International Cooperation Agency (JICA) is one of the biggest financiers of the Delhi Metro and the cost overrun will impact its disbursement of funds.
According to DMRC, due to the project cost escalation, the funding by JICA would need to increase by at least 5%-6%. “Initially, the loan from JICA was about `18,565 crore, which has increased to about `20,000 crore,” a DMRC official said. More info