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| Rail Vikas Nigam to look at PPP route in state |
| Mahesh Kulkarni / Chennai/ Bangalore Jul 13, 2010, 00:29 IST |
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The Ministry of Railways has directed the Rail Vikas Nigam Ltd (RVNL), a government of India company, to examine the possibility of setting up a special purpose vehicle (SPV) to take up the construction of two new railway lines under the public-private partnership (PPP) model in Karnataka.
The state government had asked the railway ministry to take up two new railway lines — Bagalkot-Kudachi and Talaguppa-Honnavar — under the PPP mode this year, a senior official in the state infrastructure development department said. The cost of the Bagalkot-Kudachi line has been estimated at Rs 1,250 crore and the Talaguppa-Honnavar line at Rs 1,100 crore.
The government had sent a proposal for taking up new railway lines including Hubli-Ankola, Honnavar-Talaguppa, Sholapur-Gadag, Bagalkot-Kudachi and Bijapur-Shahabad among others on priority. However, the railway ministry has asked RVNL to examine only two projects, the official said.
“The government of Karnataka is keen on developing the railway network in the state which is way behind the neighbouring states. The government had sent a proposal in April this year seeking approval for five projects. But, the railway ministry has now asked RVNL to study the possibility of a PPP model to take up two projects,” the official told Business Standard.
A special purpose vehicle would be set up to take up these projects in the PPP mode. While both the state government and railway ministry would take up 13 per cent each in the SPV, the balance 74 per cent would be offered to the private sector partner, who will also bring in the funds to execute the projects, he said.
Infrastructure Development Corporation (Karnataka) Limited (iDeCK), a 49:49.5:1.5 per cent joint venture between government of Karnataka, Infrastructure Development Finance Company Limited (IDFC) and HDFC has conducted the bankability study for these projects and recommended the government to take up these new railway lines, P V Ravi, managing director, iDeCK, said.
For 2010-11, the state government has announced a budget of Rs 500 crore for various railway projects, which is more than double that of the Rs 243 crore spent last year.
The railway ministry is said to have declined the state’s offer to take up the Hubli-Ankola railway line in the PPP mode and has indicated that it would be done by the ministry. However, the proposal is presently awaiting approval from the ministry of environment and forests as the project passes through the dense forest in the Western Ghats.
Hubli-Ankola new railway line has been proposed for the development of Uttara Kannada by creating a railway line through the Western Ghats. It is proposed to be 167 km broad gauge single line system estimated to cost about Rs 1,000 crore. The project proposal is mainly for transportation of bulk commodities like iron ore, coal, and fertiliser, to Karnataka ports.
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