RITES doing a detailed feasibility study

Mamuni Das

The proposed track


Proposal

to set up a SPV for the over Rs 27,000-cr dedicated corridor

Railways

expected to have a majority stake in the SPV

SPV

to be in charge of infrastructure, whereas Railways would maintain rolling stock

Revenues

for operations likely to go to Railways, which will pay SPV access charges for using infrastructure

New Delhi, June 15

The Railway Ministry has sent a proposal to the Cabinet for setting up a special purpose vehicle (SPV) for the over Rs 27,000-crore dedicated rail freight corridor, according to sources.

The project would be funded by a combination of internal resources, budgetary support, assistance of bilateral or multilateral agencies, and market borrowings.

Another possible source of partial funding would be by the Japanese Government under the Special Terms of Economic Partnership Scheme, said officials.

After the SPV is set up, equity participation from various stakeholders would be finalised.

Rail India Technical and Economic Services (RITES) a public sector undertaking under the Ministry of Railways, which is already doing a detailed feasibility study for the project, is likely to complete the study by end-2006. A final location survey would also be undertaken, said sources.

The Railways is expected to have a majority stake in the SPV. The SPV would be in charge of infrastructure including tracks and signalling system, whereas the Railways would maintain the rolling stock.

The revenues for operations are likely to go to Indian Railways, which in turn would give access charges to the SPV for that portion of the journey for which the infrastructure of the dedicated freight corridor is used.

(This article was published in the Business Line print edition dated June 16, 2006)
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