The Indian Railways has finally dropped its fixation for broad gauge tracks to attract more bidders for the 63-km Mumbai suburban rail project. It has decided to adopt standard gauge tracks for the project between Churchgate and Virar, to be undertaken at an estimated cost of Rs 22,500 crore.
The Mumbai suburban rail project is one of the projects flagged by the Prime Minister’s Office for award within the next six months.
Gauge is the width between tracks. Standard gauge tracks are marginally less wide than broad gauge ones. The Railway network is based on broad gauge.
Adoption of standard gauge will increase the pool of coach suppliers, as globally more coach suppliers are available for standard gauge tracks.
To make the public-private partnership project more attractive, the Railways said bidders could ask for viability gap funding (VGF) of more than 20 per cent of the project cost to build and operate it.
However, in case bidders demand more than 20 per cent of VGF, the decision to award the project with more grant would be taken by the Finance Ministry. It also changed the route alignment to ensure minimum land acquisition, and a mix of over and underground network.
Also, the Railways has now offered 12 land parcels instead of the earlier eight and has approval from the Maharashtra Government for more floor space index . This means more real estate development by bidders on the same patch of land.
Having taken steps to make the project more attractive, the Indian Railways has decided to invite fresh bids for the qualification proposal. However, the Railways still has to sign a support agreement with the Maharashtra Government and is yet to take a call on the duration of the concession. “Whether the project will be given out for 50-60 years or 90 years will have to be decided through inter-Ministerial consultations,” said a Rail Ministry source.
Earlier, six players had evinced interest in the project — Larsen & Toubro, IL&FS, Spanish firm CAF, Gammon, Reliance Infra and GMR. Most of these firms already have high debts.