Vijayawada: In a shot in the arm to the proposed Vizag metro rail project, the Korea Exim Bank has come forward to fund the infrastructure cost of Rs 4,200 crore, which is the state government’s component of 51 per cent of the innovative PPP model.
KEXIM Bank will lend the money at an interest rate between 6.5 per cent to 7 per cent for a repayment tenure of 20 years with 5 years moratorium. The Amaravati Metro Rail Corporation had appointed a financial advisor or loan arranger for the purpose.
AMRC had embarked on the PPP model to keep the Metro Rail project rolling. Under the PPP model for Vizag Metro, the government will bear 51 per cent of the total cost by creating civil infrastructure and the private investor will pump in 49 per cent of the cost in acquiring rolling stock like rail coaches, electrification and mechanical work, Operation and Maintenance (O&M) for a prescribed period.
The total cost of the Vizag Metro Rail project, excluding land costs, is '8,300 crore. In the government funding model envisaged earlier, the state government’s burden was 80 per cent that came to '6,640 crore. In the PPP model, the state government’s burden will be 51 per cent which comes to '3,780 crore after a grant of 10 per cent from the Centre.
For the state government’s component, AMRC had approached various Indian and international financial institutions.
Of all the financial institutions AMRC approached, KEXIM Bank came forward to offer the loan at the lowest interest rate.
