Putting to rest the public demand for suburban trains, particularly in Bengaluru, the Ministry of Railways has come out with a draft Suburban Rail System Policy that entrusts major responsibility on the State government.
Among other things, the policy prescribes formation of a special purpose vehicle (SPV) and asks State governments to make land available for the project.
The policy clearly states that the available railway infrastructure cannot be utilised for suburban rail projects as it would affect long-distance freight and passenger train operations. The Indian Railways (IR) would offer land on lease if available and in the alternative the government should acquire the same, along side the existing network. Projects that can be integrated with the existing railway system only would be considered.
IR and respective State governments would pool in equal equity, not exceeding 40 per cent of the capital cost of the project, to the SPV, while the remaining funds have to be raised by the SPV. The IR would provide its equity only when 70 per cent of the required land is made available for the project.
The policy states that the project can be executed either by the SPV or by the IR (on request by SPV); however IR has to do work on tracks, overhead equipment, and signalling since they need to be integrated with existing railway system.
Revenue sharing
Though all the revenues are payable to the SPV, IR may collect the revenue and remit the surplus (if any) to the SPV every year. The State government is bound to reimburse operation and maintenance expenses, depreciation and revenue accrual to IR, on a pre-decided agreement with the SPV.
It says IR is not in a position to fund these projects because of severe fund crunch.
