Hyderabad: The AP government has directed the Amaravati Metro Rail Corporation (AMRC) of Vijayawada to enter into an agreement with the Delhi Metro Rail Corporation (DMRC) for execution of the Vijayawada Metro Rail Project.
The DMRC has opposed some conditions in the draft agreement. The state government has directed the AMRC to finalise the draft agreement after consultation with the principal advisor to the state government E Sreedharan.
Meanwhile, the state government issued orders, sanctioning an amount of Rs 10 crore to the DMRC as token fund to enable it to start preparatory action on behalf of the AMRC, Vijayawada. The DMRC is not able to accept all the changes suggested by the state government and requested to finalise the agreement after incorporating its suggestions and arranged to sign it at the earliest.
The important clauses which were not agreed to by the DMRC are a tripartite agreement as it does not exist on date. The DMRC, while agreeing with the formula adopted by the state government, based on the estimated project component-wise cost, also indicated an extra fee of 6 per cent on contingencies, 3 per cent on all items which will come to Rs 111.20 crore plus escalation of .5 per cent of the project cost, which comes to Rs 937.15 crore (total Rs 1048.7 crore) and fee at the rate of 6 per cent on that amount will be Rs 62.9 crore besides agreed fees which`was suggested by AP as Rs 222.40 crore, with the total remuneration claimed by DMRC as Rs 285.30 crore. The DMRC did not agree to have a clause that the agreement shall be reviewed subject to the guidelines and conditions of the multi-lateral funding agencies. The other items which were not agreed to by DMRC are minor in nature and can be resolved by mutual consultation with AMRC and DMRC at the time of entering into the agreement between AMRC and DMRC.
The AMRC will be the owner and administrator of the Vijayawada Metro Rail project and the DMRC will be the executing agency of the project on a turnkey basis on behalf of the AMRC. In respect of a tripartite agreement, it is evident that after approval of the project by the government of India, the GoI will have 50 per cent partnership in AMRC and a condition will be imposed by GoI in the sanction order of the project for the tripartite agreement and that the same will prevail over the other agreements and therefore it is necessary to have the provision, similar to clause in the agreement.
Regarding payment of remuneration to the DMRC, the state government said though the DMRC agreed to calculation of remuneration on the estimated project component cost, they had also calculated remuneration at the rate of 6 per cent on the contingencies and escalation of the total project cost. The state government said that the actual cost of contingencies and escalation could only be known during the execution of the project and it was premature to decide any claim of remuneration at this point....