The State government gave its nod to Amaravati Metro Rail Corporation (AMRC) to enter into an agreement with Delhi Metro Rail Corporation (DMRC) to execute the Vijayawada Metro Rail Project (VMRP) on turn-key basis. However, the government imposed a few riders to enter into agreement with the DMRC, since the latter raised certain objections to the clauses in the agreement.
It may be mentioned here that the AMRC and DMRC agreement to execute the VMRP was modelled on the basis of an agreement entered between DMRC and Kochi Metro Rail Corporation (KMRC). But AP government suggested few modifications to which the DMRC expressed reservations.
They include, a “Tripartite Agreement”, “Payment of Remuneration” and “Guidelines of Multi-Lateral Funding Agencies”. There were also few other items which were not agreed by the DMRC. But, as they were minor issues the same could be sorted out and resolved by AMRC and DMRC though mutual consultation, the government said.
Following the objections raised by the DMRC, the State government had held discussions with Principal Advisor to the Government Dr E Sreedharan in the first week of May on the issues raised by the DMRC in regard to entering into an agreement to execute the VMRP.
According to the government, the project would be executed by the DMRC on behalf of the AMRC. But, it needed the concurrence of the Government of India (GoI). As such, on approval of the project, the GOI will have a 50 per cent share in the AMRC, along with a condition in the sanction order that a tripartite agreement has to be entered into. A similar provision was listed in the case of KMRL and DMRC, it noted.
On a fixed 6 per cent calculation arrived by the DMRC in regard to the contingencies and escalation of the total project cost. However, the actual cost of contingencies and escalation can only be known during the execution of the project. Hence, it would be premature to decide any claim of remuneration at this point of time prior to the execution of the project. And, it would proper to allow the "Remuneration of 6 per cent based on actuals" as and when the expenditure on the above items are known, the government pointed out.