The team from Agence Francaise De Developpement (AFD) comprising Mr. Cheikh Dia and Mr. Gautier Kohler concluded the final round of discussions with Mr. Elias George, Managing Director and the other Directors from KMRL on 9th and 10th January`14.  The basic purpose of the mission was to negotiate and finalise the provisions of the Agreements to be signed between AFD, the Government of India (GoI) and KMRL.   As a result of these discussions, there has been a broad Agreement between KMRL and AFD regarding the provisions of the Agreements.  The draft Agreements have to be approved by the Department of Economic Affairs (DEA) of the GoI, and it is also tentatively proposed to have the Agreement between KMRL and AFD signed at Kochi in February 2014.  A delegation from the French Embassy in India as well as the top officials of AFD including the CEO of AFD, Ms. Anne Paugam is expected to be in Kochi for signing the Agreement.

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A key reason for AFD’s funding of the Kochi Metro Rail project is our commitment to having an integrated transportation system in place in Kochi.  The proposed Agreement will have commitments and timelines for putting in place an innovative, coordinated passenger-centric transportation system (UMTA) for the city of Kochi over an agreed timeframe.  The effective implementation of UMTA on agreed timelines is a pre-condition for disbursement of funding from the AFD.

Another critical condition for the loan disbursement is AFD’s conditionalities relating to good governance, transparency, competitiveness and integrity, particularly in procurement.  The Agreement to be signed with AFD envisages specific provisions for ensuring integrity, openness, transparency, competitiveness and quality in all facets of the procurement process.  The AFD has specific procurement manuals, which stipulates how the bids are to be processed in accordance with these norms, and the AFD’s specific approvals are required for the tender procurement documentation at various stages of the bid process.  Consequently, procurements made for Kochi Metro will have to follow these procedures.

The AFD conditions also include the need to do a comprehensive audit of all facets of the Kochi Metro Rail project, including project progress, expenditure and Safety and Quality Audit by an independent third party auditor.

The draft Agreement also envisages oversight of the project progress and the timelines by the AFD.  The disbursement for the project will have to be linked with the commitments made by KMRL regarding the scheduling of the project.  The release of the installments of AFD funding will depend on KMRL’s compliance with the conditionalities stipulated by the AFD.

In addition to the funding for the Kochi Metro Rail project, it was also agreed in the discussions, that AFD would consider proposals for technical assistance to be submitted by KMRL in the following 3 areas :

a) Effective implementation of UMTA at Kochi

b)   Minimising environmental impact of Metro Village

c)    Strategy for operation and maintenance of the Metro Rail system

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