Kerala Cabinet decides to give Kochi metro work to DMRC

Last Updated: Tue, Oct 16, 2012 19:44 hrs

The decision to award the contract has been pending since the last eight months as some ministers and senior officers said global tender was must for carrying out such major infrastructure projects.

The state Cabinet has decided to entrust the Kochi metro rail work to the Delhi Metro Rail Corporation (DMRC) on a nomination basis.

Chief minister Oommen Chandy has directed state representatives on the director board to inform the board about the decision when it meets on October 19.

The decision to award the contract has been pending since the last eight months as some ministers and senior officers raised objection and said global tender was a must for carrying out major infrastructure projects. They cited the directions from the Central Vigilance Commission (CVC) in 2011 that suggested global tender for all big projects involving overseas financial assistance. The project requires an overseas loan of Rs 2,150 crore.

Besides, allotting the work to DMRC on a nomination basis would create corruption allegations in future and transparency could not be ensured. The Opposition parties, on the other hand, allege that the global tender is for receiving huge sums of money as commission. They said DMRC had prepared the detailed project report and already started construction of two overbridges in Kochi as part of the preparatory work.

However, DMRC mentor E Sreedharan in a letter to the central and state governments said global tender was not essential in the case of two PSUs. The CVC in its guidelines has said a contract can be awarded through nomination basis in the case of two governments organisations. Here, both Kochi Metro and DMRC are government-owned and controlled institutions.

But those arguing for global tender say nomination is applicable only in the case of natural calamities and other emergency situations. A senior IAS officer told Business Standard that DMRC could also participate in the global tender.

It all began when state public works minister VK Ebrahim Kunju in last December indicated that the Kochi Metro would be awarded by a global tender even though initial ground work on the project was started by DMRC. Chandy, however, has maintained that DMRC would get the project work.

In view of this, the forthcoming board meeting is crucial. The 10-member board, chaired by Sudheer Krishna, secretary, urban development ministry, has five representatives from Kerala. They are K Jayakumar, chief secretary, VJ Kurian, principal secretary -water resources, VP Joy, principal secretary - finance, Sheik Pareeth, Ernakulam district collector, and Elias George, managing director, KMRL.

Chandy hinted at seeking central intervention if the CVC raised objections.

Earlier, Sreedharan had said the delay in the project would cost Rs 40 lakh additional on a daily basis. The total project cost is now estimated at Rs 5,181 crore and expected to be completed in 2016. Prime Minister had laid the foundation stone on September 13.

The government was also keen to give mono rail projects in Thiruvananthapuram and Kozhikode to DMRC, which has already been appointed as consultants of Kozhikode mono rail, the chief minister told mediapersons.

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