‘Option may help lessen financial burden on KMRL’
Kochi Metro Rail may choose the InvIT mode to raise funds for its approximately ₹3,000-crore Bliss City project in Kakkanad so that the project can be executed without the metro agency availing loan for capital investment.
The Bliss City has been envisaged as a wellness and wholesome entertainment destination in 31 acres of land in Kakkanad, to garner non-ticketing revenue for Kochi metro’s operation and maintenance.
InvIT or Infrastructure Investment Trust funds are similar to mutual funds. While mutual funds provide an opportunity to invest in equity stocks, an InvIT allows one to invest in income-generating infrastructure projects. Even as land would continue to belong to the owner agency (in this case, KMRL), stakeholders who invest will be responsible for the project’s operation and maintenance.
“The InvIT mode, which will be a long-term plan, will help lessen financial burden on KMRL that has already availed substantial loan for Kochi metro and Water Metro projects. Ultimately, the agency’s Director Board must take a call on this, based on the outcome of a (feasibility) study,” said official sources.
By availing the InvIT mode, one can generate revenue for future investment. Public sector undertakings like PowerGrid have opted for this route. Care has to be taken so that investors are assured of returns. Kochi metro has the potential to make operational profit, while it is struggling to get returns on investment which came to approximately ₹5,200 crore. The operational profit could be capitalised and reinvested in ventures like readying extensions from the existing metro corridor, rather than depend yet again on equity from the State and Central governments, they added.
Metro sources said KMRL was in the process of getting possession of the entire parcel of 17 acres PWD-owned land in Kakkanad, as had been envisaged. “Another 14 acres nearby too is needed for the Bliss City project,” they said. The KPMG has been entrusted with conducting a study and readying a master plan for the project.
Meanwhile, socio-environmental activists and a section of residents have flagged the ecological damage over the possible axing of 4,000 trees of 180 species on the 17-acre land.
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