New Delhi: In order to speed up metro projects being executed in the national capital, Delhi government has decided to extend an interest-free loan of Rs 1,546 crore to DMRC, relaxing the existing rules.
As per existing norms, Delhi Metro Rail Corporation (DMRC) has to pay VAT on purchase of every item during the ongoing projects to the city government, which later reimburses the amount after verifying all purchases.
Delhi Transport Minister Gopal Rai said the government will extend the loan of Rs 1,546 in three installments - Rs 646 crore in 2015-16, Rs 450 crore in 2016-17 and Rs 450 crore in 2017-18- to the DMRC.
The decision was taken at a Cabinet meeting chaired by Chief Minister Arvind Kejriwal yesterday.
"We used to reimburse the VAT amount paid by the DMRC, but the process would consume more time and often cause delay to projects. For instance, the government had reimbursed the VAT amount, which was to be paid in 2010 to Metro, in 2014.
"As per the new rule, we will extend interest-free loan in advance which the Metro used to give to the government in forms of VAT," Rai said.
A senior official said the DMRC will now have to pay VAT on every purchase to the city government, and in return for this, government will extend a loan to the metro.
Recently, the AAP government accorded in-principle approval for construction of Metro Phase-IV.
DMRC has set 2021 deadline for the phase-IV expansion, which would add 75 stations to the network. A total of 31.47 kms of new lines would be underground, while 64.39 km would be elevated.
Delhi government has written to DMRC, saying it will go for the revenue sharing model adopted in the previous phases.
Among the projects chosen under Phase-IV are Rithala - Narela (21.73km), Janakpuri West-RK Ashram (28.92km), Mukundpur-Maujpur (12.54km), Inderlok-Indraprastha (12.58km), Tughlakabad-Aerocity (20.20 km), and Lajpat Nagar-Saket G-Block (7.96 km)