The cost of the delayed Versova—Andheri—Ghatkopar Metro project rose 84% to Rs4,321 crore. Although the Reliance Infrastructure-led Mumbai Metro One is going to miss its seventh deadline this September, the company is seeking to hike the fare to substantiate increased project cost
Repeated delays and rising cost of raw material has caused construction cost of the Mumbai Metro project to shoot up by 84%. It is now going to cost Rs4,321 crore, up from its original cost of Rs2,356 crore. The project was scheduled for completion in March 2012, but remains "work in progress," according to Maharashtra chief minister Prithviraj Chauhan. The 12km long Versova- Andheri-Ghatkopar metro project is going to miss its seventh deadline, which was on September 2013, and is now scheduled to be completed early next year.
Right to Information (RTI) Activist Anil Galgali, who is closely following the progress of the Mumbai Metropolitan Region Development Authority (MMRDA) and state government projects, filed an RTI application seeking information on cost escalation and other issues. The response to his RTI query reveals many facts.
The Public Information Officer (PIO) of MMRDA, in his reply stated, "In meeting held on May 2012, Board members had approved a revised budget of Metro project cost around Rs4,321 crore. The MMRDA will not share the additional cost. MMRDA will only consider original cost of Rs2,356 for project and its cost sharing formula would be the same in 70:30 ratio as per the agreement signed between government of Maharashtra and Mumbai Metro One Pvt Ltd (MMOPL)."
As per the agreement, the state government's share in the project was Rs1,194 crore while the rest Rs512 was to be paid by MMOPL. MMOPL is a special purpose vehicle (SPV) set up for the project between MMRDA, Reliance Energy Ltd (now Reliance Infra), and Veolia Transport of France. Reliance Infra holds 69% (Rs354 crore) in the SPV, while MMRDA holds 26% (Rs133 crore) and Veolia the remaining 5% (Rs25 crore) stake in MMOPL. The viability cost funding in the original project was Rs650 crore. While the union government was expected to pay Rs471 crore, the MMRDA was to bear Rs179 crore out of this viability cost funding. In short, as per the original project cost, MMRDA's was expected to pick-up a tab of Rs312 crore for the metro.
Although, the MMRDA has approved revised budget for the project, it had not specified about sharing the additional cost in the MMOPL, the SPV for the project. So this brings forth an important question as to who will then bear the additional burden?
Galgali says, "It is full responsibility of MMOPL to complete project within the deadline. The deadline is extended for seven times and the government should not sanction a single paisa increase to MMOPL and instruct MMRDA to get the metro ready at the earliest".
"MMOPL is keeping everyone in the dark. Even Reliance Infra is not in a position to state the reason behind the cost escalation. This indicates MMOPL's lack of planning and unfortunately the MMRDA has been very soft on MMOPL," Galgali alleged.
He also slammed MMOPL's decision to let Reliance Infra use its name on the coaches for the metro. On this issue, MMRDA in its reply to the RTI application confirmed that the name put up by Reliance Infra on coaches is permitted neither by the Authority nor by the state government.
Reliance Infrastructure-led MMOPL has failed to complete this project before deadlines due to many factors such as changes in designs, rupee depreciation, space crunch, utility shifting and getting approvals, litigations, addition of extra coaches and delay in receiving permission from Indian Railways.
MMOPL has approached the state government as well as the MMRDA seeking revision in ticket fares due to an increase in construction cost and purchasing extra rakes with an expectation of high ridership. The present fares are: Rs6 up to first 3km, Rs8 between 3km to 8km and Rs10 for more than 8km. The demand by MMOPL is to increase the fares up to Rs35. However for time being, this issue will not touched by the state government.
The first phase of Mumbai Metro rail project was inaugurated by Prime Minister Manmohan Singh in June 2006. Mumbai Metro is the India's first public private partnership metro project in which all the three phases of construction, operation and maintenance have been given to a private players.
Microsoft has agreed to a 10-year license arrangement to use the Nokia brand on current and subsequently developed products based on the Series 30 and Series 40 operating systems
Mobile handset maker Nokia Corp said it signed an agreement with Microsoft to sell all of its devices and services business and patient licences for 5.44 billion euro in cash, payable at closing the deal.
In a release, Nokia said it would to book a gain on sale of about 3.2 billion euro from the deal that is expected to close in first quarter of 2014.
Microsoft will acquire substantially all of Nokia's devices and services business, including the mobile phones and smart devices business units as well as an industry-leading design team, operations including all Nokia devices and services production facilities, devices & services-related sales and marketing activities, and related support functions. At closing, around 32,000 people are expected to transfer to Microsoft, including about 4,700 people in Finland.
However, Nokia's chief technology office (CTO) organization and patent portfolio will remain within the handset maker Group. The operations that are planned to be transferred to Microsoft generated an estimated 14.9 billion euro, or almost 50%, of Nokia's net sales for the full year 2012.
Microsoft has agreed to a 10-year license arrangement to use the Nokia brand on current mobile phones products. Nokia will continue to own and maintain the Nokia brand. Under the terms of the transaction, Microsoft has agreed to a 10-year license arrangement to use the Nokia brand on current and subsequently developed products based on the Series 30 and Series 40 operating systems. Upon the closing of the transaction, Nokia would be restricted from licensing its brand for use in connection with mobile device sales for 30 months and from using the brand on its own mobile devices until 31 December 2015.
Following the transaction, Nokia said it plans to focus on its three established businesses NSN, its network infrastructure and services business; HERE, the mapping and location services business; and Advanced Technologies, the company's technology development and licensing business.
As part of the transaction, Nokia will grant Microsoft a 10 year non-exclusive license to its patents as of the time of the closing, and Microsoft will grant Nokia reciprocal rights related to HERE services. In addition, Nokia will grant Microsoft an option to extend this mutual patent agreement to perpetuity. Of the total purchase price of 5.44 billion euro, 3.79 billion euro relates to the purchase of substantially all of the devices and services business, and 1.65 billion euro relates to the mutual patent agreement and future option.
Additionally, Microsoft will become a strategic licensee of the HERE platform, and will separately pay Nokia for a four year license. This revenue stream is expected to substantially replace the revenue stream HERE is currently receiving from Nokia's devices and services business internally. If the transaction closes Microsoft is expected to become one of the top three customers of HERE.
Microsoft has agreed to make immediately available to Nokia 1.5 billion euro of financing in the form of three 500 million euro tranches of convertible bonds to be issued by Nokia maturing in five, six and seven years, respectively, the release said.
As of 2012, Nokia employed 101,982 people across 120 countries, conducted sales in more than 150 countries, and reported annual revenues of around 30 billion euro.