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Urban Development Ministry to Focus on Property Development for Metro Rail Project

Union Urban Development Ministry will be focusing on property development to meet financing needs of metro rail projects as it embarks on an ambitious plan to spread the Metro Rail network to all the towns with a population of two million and above. Ludhiana, Pune, Ahmedabad, Lucknow, Indore, Bhopal, Chandigarh and Nagpur are on the immediate radar of the Ministry.

Urban development minister Kamal Nath informed that in order to reduce dependence on growth budgetary support and also loans from multilateral agencies, his ministry proposes to raise resources through land monetisation. In Delhi, DMRC, according to Nath has granted approval to avail of additional FAR for property development. Currently, DMRC has been engaged in the development of commercial office and retail property in Delhi as a mechanism to raise resources, and residential property development is also on the anvil.

Metro Rail network in Delhi and other parts of the country is being developed on different models including DMRC model, PPP model, Private Funding model and State Funding model. Under the DMRC model, both the Centre and the state government finance 50 per cent of the cost each. The current Metro Rail projects in Delhi-NCR and Bengaluru are executed on DMRC model. More projects have been taken up in Bengaluru, Kolkata and Chennai under the DMRC model at a cost of Rs 31,083 crore. Besides, a 20.4 km Mumbai Metro Line-3 at a cost of Rs 12,015 crore and 25.3 km Kochi Metro at the cost of Rs 4,722 crore is under consideration.

Under the private funding model, a five km rapid metro rail project is being taken up by real estate major DLF at the cost of Rs 1,088 crore, while a complete state funded Rs 1,250 crore Metro Rail Stage-1 project in Jaipur has been sanctioned. Meanwhile, Urban Development Ministry is giving first preference to PPP model of funding. “In Delhi, we have already introduced this model on Airport Line, though PPP model is not viable on all the routes. It is side specific and depends on the maximum monetisation that can be done,” told Nath.

Currently under the PPP mode, Metro projects have been taken up in Hyderabad (71 km), Mumbai Line-1 (11.07 km), Mumbai Line-2 (31.87 km) at a cost of Rs 12,132 crore, Rs 2,365 crore and Rs 7,660 crore, respectively. In addition to these, Rs 7,700 crore Jaipur Metro Stage-2 project, Bengaluru Airport project costing Rs 6,000 crore and Chennai Metro Line-1 project costing Rs 2,845 crore are also in the pipeline.

In a significant move, the centre has given green light for Delhi Metro Phase-4 project spanning seven new corridors, while another 103 km is being added under the Phase-3 project at a cost of Rs 35,242 crore. After the completion of Phase-4 by 2021, another 104 km will be added to the Delhi Metro network taking the total coverage area to 240 km, surpassing the London Underground Metro.

News Published Under:   Delhi, Faridabad, Gurgaon, Noida, Real Estate Developers, Real Estate India | No Comments »

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