BENGALURU: The Special Purpose Vehicle (SPV), proposed to create a dedicated suburban railway network for the city, can be formed only after the State government alters the ownership pattern of the corporation set up for railway infrastructure projects, top railway officials said. The state is working on it and plans to put up a Cabinet note shortly on the need to change the shareholding pattern in the Karnataka Rail Infrastructure Development Corporation (K-RIDE).
The stumbling block in the present pattern of K-RIDE is the presence of the Infrastructure Development Corporation Karnataka Ltd (iDeCK), as it is partly owned by private firms. A senior railway official said, “The Centre cannot enter into any partnership where private players are involved. I-DECK presently owns 48 per cent of shares in K-RIDE while Indian Railways and Karnataka Government own 26 per cent shares each.”
iDECK was set up in June 2000 by the State government as part of its efforts to rope in private players in strengthening infrastructure for projects. Its partners are Infrastructure Development Finance Company Ltd (IDFC) and the Housing Development Finance Corporation Ltd.“SPV for the suburban rail must be a joint venture between the Centre and State. Hence, the articles of association of K-RIDE need to be reframed to facilitate creation of SPV,” another official said.
Under the new Suburban Rail Policy announced by the Centre in April 2017, the State needs to be the primary owner of the SPV. “Hence, both the governments need to buy out the shares of iDECK so that the Government of Karnataka holds 51 per cent ownership while the Centre has 49 per cent,” he added.
When it comes to implementation of projects by the SPV, the two governments would share the cost equally as had been agreed upon. “Each will bear 20% of the cost while 60% will be mobilised by the SPV through borrowings. The repayment of the loans taken by the SPV too will be split equally between the State and the Centre,” the official said.
A State government official said that the process of altering the ownership pattern in K-RIDE has already begun. “We will soon put up a cabinet note,” he said.As per initial feasibility report, the suburban network is estimated to cost `17,000 crore and run 161 km, of which 72 km will be elevated. The Detailed Project Report is expected to be released by consultancy firm RITES in January.