Bhopal Metro opens options to collect fund of Rs700 crore through bonds

Bhopal/Urban Transport News: The loan from the European Investment Bank (EIB) for Bhopal Metro will be available only in next financial year. Meanwhile the state government is going to give 200 crores to the MP Metro Rail Co. to start work. This amount will also be taken from HUDCO as a loan. Apart from this, the company has also opened the option of loan from Indian banks apart from issuance of bonds for Rs 700 crore on 10 per cent interest.

After the Center's approval, the focus of the officers of the Metro Rail Company is to start work of the project and to arrange the fund for the project. After the refusal of Japanese Bank Japan International Cooperation Agency (JICA) at the last stage, the company is taking extra care in case of EIB. EIB has given theoretical consent on giving loans to this project. According to company officials, the first installment of loan will be available only in the next financial year.

Lucknow metro got loan from EIB on 0.55% interest EIB has sanctioned a loan on 0.55 percent for the Lucknow Metro in 2016. At that time a loan of Rs.1500 crores was approved and the bank agreed to give a total of Rs.3300 crores. In the 20 year loan term, there are no installments for the first four years. Lucknow is the first Metro project in the country that received loan from the EIB. It is believed that Bhopal will also get loan on these terms. It is worth mentioning that the JICA were offering loans at only 0.3 percent, but they had the condition to take material from Japanese companies. But EIB has not put any such condition.

Now MP Metro Rail Company is expected to get Rs 200 crore loan from HUDCO. This amount will be received through the state government. The state government will make provision in the budget for the payment of the balance to the company. For this, one per cent (surcharge) can be levied on stamp duty. Apart from this, the amount of central government share will also come through the budget. "There will be no problem with finance in the Metro project. EIB has given theoretical consent on loan. Other formalities will also be completed in three-four months. We will also get a share of the center and state. Options for issuing bonds or taking loans from Indian banks are kept open for 10% of the amount", said Vivek Agarwal, MD, MP Metro Rail Company.