Japan quake likely to rock metro

The recent earthquake and tsunami in Japan may have a very unlikely aftermath. With the country needing a whopping $150 billion to recover from the devastation, the Japanese International Cooperation Agency (JICA) may shrink the size of its funds directed towards foreign countries.

The agency has been approached by the Mumbai Metropolitan Region Development Authority (MMRDA) for funding the third metro line in Mumbai.  

Rahul Asthana, the newly-appointed commissioner of the authority, does not rule out the possibility of a setback to the plans of getting funds from JICA.

“Although is too early to say anything concrete about the development since Japan will take a long time to recover from the earthquake and the devastating tsunami, followed by the blasts at its nuclear plants. However, there is a possibility that JICA might squeeze a portion of its funds which it normally gives away to foreign countries for development. In that case, the authority will have to explore other options of financing the 20km third metro — which is partially underground,” said Asthana.

The authority has been on the lookout to fund the viability gap of the third metro line running between Colaba and Bandra. Initially, the central government had given a verbal promise to provide some financial assistance.

However, as MMRDA realised that the Viability Gap Funding (VGF) was to the tune of 50% of the project, the Centre refused to fund the entire VGF.

According to officials from the authority, even the World Bank has shown interested in funding the third metro. “However, we found out that the JICA’s loan would be more viable and cost effective,” said one of them.

The 20-km long corridor is to be based on the Delhi metro model, in which the central government will be funding 19% equity and the state government as well as the authority will fund 21%.

The rest 60% is to be a loan from agencies such as JICA. The total cost of the line-III which will run underground from Colaba to Mahalaxmi is approximately Rs12,000 crore. 

In spite of the situation in Japan, Asthana felt that there may not be a direct impact on the metro funding. “In any case, our proposal is pending with the Government of India. Moreover, we always have the option of either World Bank or a conglomerate of Indian banks providing us with the equity that we need. However, I must say that the disaster in Japan has definitely had an impact on JICA funding,” said Asthana.