Says the state-specific project is not eligible for incentives from the Centre
The finance ministry has expressed reservations against giving tax sops to Delhi Metro Rail Corporations (DMRC) second phase construction on the grounds that the state-specific project is not eligible for tax sops from the Centre.
The ministry, however, is in the favour of giving specific benefits through budgetary mechanisms like direct subsidies to the project.
It has said the entire issue of fiscal relief should be reconsidered by the empowered group of ministers on Delhi metro rail, headed by defence minister Pranab Mukherjee, sources told FE.
The DMRC is seeking tax and duty exemption of around Rs 1,194 crore. This includes a Rs 605.34-crore customs duty waiver, Rs 352.24 crore of excise exemption, tax waiver of Rs 146.63 crore and another Rs 90.93 crore as work contract tax exemption. These apart, the corporation wants a cut in electricity tax and immunity from exchange rate fluctuations.
The DMRC will not pay any dividend till the senior debt (56% equity of Japan Bank for International Cooperation, approxImately Rs 4,523 crore) is fully paid.
What DMRC wants
Tax and duty exemption of Rs 1,194 crore.
Customs duty waiver of Rs 605.34 crore
Excise exemption of Rs 352.24 crore
Tax waiver of Rs 146.63 crore
contract tax exemption of Rs 90.93 crore
A cut in electricity tax and immunity from exchange rate fluctuations
The BJP government had given customs and excise duty exemption of Rs 1,407 crore to the DMRC in 2002 for the first phase of the project. In phase II, the DMRC will construct a total of 53.02 km-42.24 km of elevated corridors, 8.93 km of underground corridors and 1.85 km of surface corridors. The total cost of phase II is estimated at Rs 8,118 crore.
There will be six lines in this phase, which will cover the 6.36 km distance from Delhi University to Jahangirpuri; the 10.87 km section from Central Secretariat to Qutub Minar; 18.07 km stretch from Indraprastha to New Ashok Nagar via Yamuna Depot in East Delhi; 6.16 km Yamuna Depot to Anand Vihar ISBT route; 3.09 km Shahdara to Dilshad Garden; and 18.47 km Kirti Nagar to Mundka section.
Once the phase II of the project takes off, the DMRC will be able to go ahead with its construction on the line up to Noida, which is expected to be ready by 2009, just ahead of the Commonwealth Games.
DMRC had got tax incentives from the Centre for the phase I of the project.