Mooted in 2014, Visakhapatnam metro still on paper as Centre blames Andhra Pradesh government

The Centre has said it is yet to receive proposals from the Andhra Pradesh government for the Visakhapatnam Metro Rail Project.

BySNV Sudhir

Published Feb 07, 2023 | 7:30 PM Updated Feb 07, 2023 | 7:33 PM

A proposed station of the Visakhapatnam Metro Rail Project. (Supplied)

It has been almost eight years since a metro rail was envisaged for Visakhapatnam, but the project — mentioned in the AP Reorganisation Act — is still hanging fire.

Notably, Visakhapatnam has been announced as the executive capital of the state as part of YS Jagan Mohan Reddy government’s three capitals proposal, and recently the chief minister himself announced that he would soon be shifting to the port city.

At this juncture, the Centre has said it is yet to receive proposals from the Andhra Pradesh government for Visakhapatnam’s metro rail.

Two Detailed Project Reports (DPR) and changes in the alignment of the Visakhapatnam metro rail project are still hanging in balance without any progress on the ground.

“The Andhra Pradesh government in September 2018 submitted a proposal for a Light Metro Rail Project for Visakhapatnam with a route length of 42.55 km with an estimated cost of ₹8,300 crore for external financial assistance from Korean EXIM Bank in public-private partnership (PPP) mode,” Union Minister of State for Urban Affairs and Housing Kaushal Kishore told the Lok Sabha during the ongoing budget sessions.

“However, the Korean side, after examining the proposal, conveyed their inability to finance the project. The Central government has so far not received any proposal for the Visakhapatnam Metro Project from the government of Andhra Pradesh with a route length of 75.3 km at an estimated cost of ₹15,993 crore,” he added.

He also said that urban transport — an integral part of urban development — was a state subject.

Therefore, the formulation of proposals regarding metro rail projects with appropriate funding patterns, along with the preparation of a Comprehensive Mobility Plan, Alternative Analysis Report, Detailed Project Report, etc, were the responsibility of the respective state governments.

“The Central government considers financial assistance to metro rail projects as and when they are proposed by the concerned state government. However, the approval of such projects depends upon the feasibility of the proposal and availability of resources,” said Kaushal Kishore.

First planned over 42.55 km

The Visakhapatnam Metro Rail Project was first mooted in 2014 as per the Andhra Pradesh Reorganisation Act. The Union government gave in-principle approval to it in 2015.

According to the original plan, it was supposed to be completed by 2018. However, the DPR was delayed due to various reasons, and the Centre came out with the Metro Rail Policy of 2017.

Subsequently, the state government prepared a DPR with three corridors spread over 42.55 km and sought funding from South Korea’s Exim bank. The bank initially showed interest in funding the project, but later backed off.

Now, as per the latest remarks by the MoS, the Andhra Pradesh government was yet to submit a fresh proposal to the Centre to secure the required assistance for the Project.

Also read: KCR lays foundation of Hyderabad Airport Metro

Innovative PPP mode

The Andhra Pradesh Metro Rail Corporation in 2019 embarked on an innovative PPP model to keep the metro rail project rolling.

Under the model, the government was to bear 51 percent of the total costs for the Visakhapatnam metro by creating civil infrastructure, and the private investor would invest 49 percent of the costs for acquiring rolling stock, electrification, and mechanical works, and Operation & Maintenance (O&M) for a prescribed period.

According to the initial estimates, the total cost of the project — excluding land costs — was pegged at ₹8,300 crore.

In the government-funding model that was envisaged earlier, the state government’s burden would be 80 percent, which came to ₹6,640 crore.

In the innovative PPP model, the state government’s burden came to ₹3,780 crore after a grant of 10 percent from the Centre.

For the state government component, the APMRC approached various Indian and international financial institutions. The K EXIM Bank had come forward to offer the loan at the lowest interest rate.

The bank had come forward to fund the infrastructure cost of ₹4,200 crore, which was the state government component of 51 percent of the innovative PPP mode.

It had offered to lend the money at an interest rate of 6.5-7 percent for a repayment tenure of 20 years with ficve years of moratorium.

However, it backed out due to unknown reasons.

Contract was to be awarded by March 2019

After that, APMRC officials wrote to the state government to initiate talks with other international financial institutions, like Asian Infrastructure Investment Bank (AIIB) and the New Development Bank (NDB), seeking funds to develop the Visakhapatnam Metro Rail Project in innovative PPP mode.

As per the initial timelines fixed, the APMRC was to award the contract to the successful bidder by March 2019, and the works were expected to begin immediately.

At that time, five firms were shortlisted and requests for proposal (RFPs) were issued to them.

These five firms submitted their technical and financial bids.

The shortlisted firms were Adani Group, Tatas, Shapoorji Pallonji Group, Essel Group, and IL&FS.

At a later stage, the APMRC received only one financial bid from the Essel Group, which was cancelled by the state government.

New DPR for 76.9 km

Now, Andhra Pradesh has laid out a revised plan at a cost of ₹20,000 crore to improve public transport by developing metro and tram corridors in Visakhapatnam.

According to a new DPR, metro rail connectivity has now been planned from the Vizag Steel Plant gate to Bhogapuram, covering a 76.9-kilometre stretch with 53 stations.

Proposals were also prepared for a 60.2-km Catenary Free Modern Tram System. It’s a 137.1-kilometre corridor including metro rail and tram.

It is estimated that the construction of metro rail would cost ₹14,000 crore and the tram services would cost ₹6,000 crore.

A Catenary Free Modern Tram System has been planned in the 32 km length of beach corridor connecting 16 tourist spots along the beach alignment and also another 28 km on two fast-growing suburban corridors linking at metro junction stations.

The metro corridors

  1. Corridor-1: Steel Plant to Kommadi – 34.40 km
  2. Corridor-2: Gurudwara to Old Post office – 5.07 km
  3. Corridor-3: Tadichetlapalem to Chinna Waltair – 6.91km
  4. Corridor-4: Kommadi to Bhogapuram Airport – 30.67 km

Catenary Free Modern Tram System corridors

  1. Corridor-1: Old Post office to Bheemili beach – 33.03 km
  2. Corridor-2: NAD Junction to Pendurthi – 10.31 km
  3. Corridor-3: Steel Plant Gate to Anakapalle – 18.40 km