Metro Rail News Online

New Delhi: The introduction of GST has made difficulty for the Delhi government to buy new metro coaches as it will have to shell out more money as compared to the centre. Delhi metro proposed to procure 582 coaches with Delhi government for 17 months but now they have piped down it’s demand for 164 coaches. So now the Delhi Metro Rail Corporation (DMRC) has sent the fresh proposal to the Delhi and the state government as both the government’s are the equal shareholders in the corporation. The Delhi Metro Rail Corporation (DMRC) director SD Sharma says wrote to the city’s transport department on June 9 that “metro will incur the costs of procurement on it’s own through ‘external borrowings’ and ‘internal accurals’. Metro originally proposed for 582 coaches to Delhi government on January 11, 2017. But after the launch of magenta line and the rise in commuters it led to more coaches. Due to the delay on the part of the city governmen...

With the rate of the Tax on Goods and Services (GST) on the construction of the metro and the monorail going down to 12 percent from 18 percent, EPC (engineering-procurement-construction) contractors in space would benefit provided their contracts they will be tendered taking into account the fiscal component. Essentially, if the EPC contractor had submitted an offer for the metro or monorail construction contract on the base price without taxes, then the decrease in the GST slab would prove to be an advantage for the company since the overall cost would decrease. However, if the contract was tendered, including the tax component, the final cost would remain unchanged. According to experts, some of the contractors who were under stress due to higher costs would get some relief. “This is a positive step in many aspects for the industry, first, the Capex for projects will be reduced, and second, there will be a significant reduction in working capital, since less funds will be block...