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Public-private woes

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Hardnews runs a long article on a collapse of an infrastructure partnership between the Delhi Metro and Anil Ambani’s ADAG:

Unlike the other stations on the Delhi Metro Rail Corporation’s (DMRC’s) network, where you may find yourself jostled, the journey on [the Airport Express Metro Rail] is surprisingly peaceful, although it makes you poorer by Rs 180 if you decide to take the entire journey from New Delhi Railway Station to Sector 21, Dwarka. With commuters dropping to just about 5,000 people every day, many wonder if this project is the new white elephant in the government’s kitty.

Reliance Infra of the Anil Dhirubhai Ambani Group (ADAG), an equal partner in the country’s first public-private partnership (PPP) project, has recently pulled out after expressing its inability to run the Metro. This move by Anil Ambani has left the DMRC holding a Rs 5,800 crore baby. It also raises strong questions on the viability of the PPP model.

On the heels of this comes a report in IE:

Anil Ambani’s Reliance Infrastructure-led Mumbai Metro One Private Ltd (MMOPL) has demanded an almost three-fold hike in fares of Mumbai Metro from what it had originally committed. … The fares at 2003-04 level were pegged at Rs 6 for less than three km, Rs 8 for travel between three to eight km and Rs 10 for travelling beyond eight km. The agreement provided for an 11 per cent fare revision after every four years. Even if one allows for such an increase thrice over till 2016, the fares in 2013 should be Rs 13.7 in the highest distance bracket. The MMOPL, however, has demanded Rs 28-30 fare for travelling eight km and beyond.

These are the only projects mentioned in Reliance Infrastructure’s website. Their failure means that private-public partnerships in urban infrastructure development need much more careful planning right up to the end of the construction phase.


Written by Arhopala Bazaloides

August 16, 2013 at 4:42 pm

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