Agreement signed for four rail projects in State

BANGALORE Nov. 24. The Government on Sunday signed a Shareholders Agreement of Rail Infrastructure Development Company (Karnataka) Limited (K-RIDE) with the Ministry of Railways signalling the launch of a unique partnership to take up four identified railway projects at a cost of<243> Rs.1,639 crores.

Officials of the Infrastructure Development (Karnataka) Limited (iDECK) and the Union Railway Ministry signed the agreement here.

The Chief Minister, S.M.Krishna, and the Railway Minister, Nitish Kumar, were present.

As per the agreement, the Government and the Ministry of Railways would each subscribe to 26 per cent of equity share capital of K-RIDE with the balance to be held by iDECK. The initial capital of K-RIDE would be Rs.5 crores, which will be later increased to Rs.20 crores.

The initial projects identified include gauge conversion of the Hassan-Mangalore and Bijapur-Gadag lines, doubling of the Guntakal-Hospet line and development of a new line between Hubli and Ankola. K-RIDE is to implement the projects and also raise funds from private investors.

iDECK has since evaluated the commercial viability of the projects and prepared a business plan for K-RIDE.

Of the four projects, the Hassan-Mangalore doubling is considered the most viable, and it is to be implemented by a dedicated special purpose vehicle. The gauge conversion of the 189-km Hassan-Mangalore line is being taken up at a cost of Rs.326 crores. Of this, The Ministry of Railways has incurred Rs.141 crores.

The balance will be financed by equity of Rs.111 crores from the Government, the Ministry of Railways and identified strategic investors. There is a debt component of Rs.74 crores.

The Chief Minister said work on the line was progressing briskly and it would be completed in the next 18 months.

The line would provide a direct link to the New Mangalore Port from the hinterland attracting significant freight traffic, particularly iron ore from the Tumkur-Chitradurga belt.

Mr. Krishna welcomed the Centre's decision to create a separate railway zone for the State with headquarters in Hubli.

However, he felt, exclusion of important iron ore loading stations in the State, including Tornagallu, Ranjitpura, Swamihalli and Yeshwanthnagar, from the zone was "clearly unjust and detrimental'' to the interests of even the exporters who could be better serviced from Hubli.

Terming the agreement as "one of the more notable achievements in more than a decade of reforms,'' he urged K-RIDE to look at developing other critical rail links such as the Kottur-Harihar and Chitradurga-Raidurg lines and the doubling of the Bangalore-Mysore line.

The Union Urban Development and Poverty Alleviation Minister, Ananth Kumar, proposed connecting Bidar and Gulbarga by rail, which he said, would reduce the distance between Bangalore and New Delhi and also the travel time.

Besides, creating a Mysore-Bangalore-Tumkur corridor through electrification and doubling would boost growth, he said.

K-RIDE will now play the role of a project development company for all railway projects in the State.

It will be a professional, board-managed company and staffed by qualified professionals.

A board of directors comprising three Government and three Railway Ministry nominees, two iDECK nominees and a chief executive officer will oversee its operations.