The suburban rail project could kick-off with an initial investment of Rs 1,000 crore, but it is yet unclear if the Cabinet will approve it soon.
Union Minister of State for Railways Suresh Angadi was vague about the timeframe as he addressed a press conference after inaugurating the Chunar-Chopan electrified railway line in Uttar Pradesh.
After Finance Minister Nirmala Sitharaman reiterated the Centre’s commitment to the suburban project in last week’s Budget speech, railway board chairman V K Yadav said he expects the Cabinet Committee on Economic Affairs (CCEA) to approve the project soon, paving the way for work to begin this financial year.
Asked if the project would get CCEA’s nod this time, Angadi shot back: “Why’are you doubting us?”
To the explanation that the project was cleared two years ago in 2018-19, but did not take off, the minister said: “During that time Karnataka had a coalition government and nobody pursued the project. Since I became minister, I’m taking it forward.”
Initial boost
While the project’s total cost is estimated at Rs 18,600 crore, the state and the Centre would fund 20% each in equity. The other 60% will be sourced through loans.
Responding to a question, Karnataka Railway Infrastructure Development (K-RIDE) Limited managing director Amit Garg said
Rs 1,000 crore is required to kick-start the work on the ground.
“In the first financial year, we propose to invest 5% of the construction cost and 50% of the land cost. So, an estimated Rs 1,000 crore is required,” he said.
Garg said they are in talks with several international agencies to get the loan. Funding is key since K-RIDE will require 15% of the project cost next year and 20% the year after.
Asked about private investment, he said investors are unlikely to put money in large infrastructure projects oriented towards social welfare.
“Though the rate of return for the suburban project is a healthy 11%, large infra projects like this have several risks, besides delay in land acquisition, construction, funding, technical risks and risks of land acquisition.
“Once the project takes off, they may show interest,” he said.