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CM plans meeting to solve funding woes

September 24 2013 10:19 AM

The CM has called a meeting to discuss measures to complete the second phase on Wednesday, including whether to include it under the JNNURM scheme or make it a revenue-generating project with adequate commercial space constructed using funds offered by a consortium of banks.

The meeting will be attended by ministers of finance, local self government department (LSG) and excise, and chief secretary, and secretaries of LSG and finance departments. Amidst uncertainties regarding funding, the Vyttila Mobility Hub Society (VMHS), which is implementing the project, has been trying to include it under JNNURM. Since financially-viable projects will not be included in JNNURM, authorities had decided to cut three floors of the proposed seven-floor project, meant mainly for commercial space. "The question is whether a project with a potential to generate adequate revenue on its own should be made a financially non-viable project just to secure funds for construction. The option to rope in a consortium of banks to construct the project as per the original plan is still open. The meeting convened by chief minister at Thiruvananthapuram on Wednesday is expected to explore the choice of availing a bank loan," said a VMHS official. There is also the argument that the project can be initially constructed using the JNNURM funds and, at a later stage, subsequent floors for commercial space can be constructed.

Earlier, a consortium of banks, comprising the South Indian Bank, State Bank of Travancore and Canara Bank, had agreed to provide Rs 264 crore for the project. But with VHMS authorities continuing to delay the project, the loan approval the consortium expired recently. Then hub authority then decided to go for JNNURM funding. As per the latest estimate, the second phase of the mobility hub, which consists of the main bus terminal, two boat jetties and the Metro rail station, would cost Rs 435.78 crore. As per the original plan, the building was to have seven stories. An entry plaza, green area, bus clinic and space for parking were also envisaged. A total of about five lakh sq ft was earmarked for commercial space. Of the Rs 435 crore required for second phase, Rs 52 crore is needed for land acquisition to widen entry and exit points.

To revert to the financially-viable design of the project, VHMS authorities have approached banks to renew the offer for funding. Banks which are part of the consortium should get fresh approval from their head offices. Sources said that the consortium has agreed to renew the loan offer. But an official communication from the banks is yet to reach VMHS.

Courtesy: The Times of India