Fund crunch hits railway projects

The railway projects, proposed to be taken up in the state on public private partnership (PPP) mode, may not take off as the Rail Vikas Nigam Ltd (RVNL) has ruled out undertaking these projects unless the state government is willing to fund them.

Chief project manager of RVNL Alok Tiwari said, “Private investors are not coming forward to invest (in these projects) due to lack of a proper business model.”

“Not even a single investor came forward when we called for expression of interest for Tumkur-Rayadurga new line. The railways is not in a position to fund the proposed projects. Therefore, it is up to the state government to decide on undertaking these projects,” he observed.

The Railway Board had proposed to undertake Talguppa-Honnavar; Bijapur-Shahabad; Tumkur-Rayadurga; Dharwad-Belgaum and Torangal-Ranjitpur projects on PPP mode in 2010-11 after the state government requested the Railway Ministry to sanction some projects on priority to improve the rail connectivity in the state.

As these railway projects are expected to contribute to the development of the areas, the state government offered to provide the land required for the projects free of cost, besides partial funding.

The Railway Board entrusted these projects to RVNL, a special purpose vehicle established by the railways for undertaking projects on PPP mode. The railways also entrusted Hospet-Vasco doubling project to RVNL. The RVNL had also got the feasibility done through some private consultants for undertaking these projects.

As investments are not forthcoming, the railways undertook Tumkur-Rayadurga project with 50 per cent funding from the state government and decided to wait till they find a private investor to undertake the remaining projects.

RVNL had to undertake Hospet-Vasco line, one of the busiest routes in the state, with loans from ADB.

http://newindianexpress.com/states/karnataka/Fund-crunch-hits-railway-projects/2013/05/17/article1593794.ece

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