Cabinet to clear decks for suburban rail SPV

The state government will soon clear the way for setting up a special purpose vehicle (SPV) for the implementation of suburban rail project as the Cabinet is expected to approve the restructuring of a company that will represent the state in SPV.

The Railway Board had last year agreed to Karnataka’s proposal to constitute an SPV through the Karnataka Railway Infrastructure Development Corporation (K-RIDE), a company in which the government was a minority holder with 49% of shares.

Sources in the government said the K-RIDE shares have been restructured and the government has become a major holder whereas private company I-DECK will hold 0.5% of the shares.

“The government and the railways will decide whether K-RIDE will be part of SPV. Once the Cabinet approves new form of K-RIDE, a memorandum of understanding will be signed with the railways on the SPV,” the source said.

It has also been proposed to increase the equity of K-RIDE from the present Rs 5 lakh to Rs 5 crore.

“The higher equity will enable the company to borrow large loans while working on projects like suburban rail,” the source said.

‘No need to wait for SPV’

A senior official noted that the railways and the state government need not wait for the SPV to take up works.

“The SPV will happen by the time the detailed project reports are prepared. K-RIDE can work with the railways on suburban rail-related projects even before,” he said.

Since the state government and the railways have agreed for equal sharing of equity and borrowings, there should be no hindrance to take up works. Besides, the SPV will take over the expenditures and borrowings from K-RIDE.

Works like doubling and electrification of the Byappanahalli-Hosur line, for which tender has already been called, and quadrupling of the Cantonment-Whitefield line can be expedited once the state government pitches in through K-RIDE, the official said.

The Rs 12,000-crore suburban rail project sanctioned by the Union government envisages a 100km rail network, including doubling and quadrupling, for local trains. Announced in the 2017 budget, the project has been stuck due to delay in the formation of SPV.