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PMO asks K-RIDE to explore private funding of coaches

The project had projected a profit margin of 10.9 per cent for the Railways.

Published: 29th February 2020 06:43 AM  |   Last Updated: 29th February 2020 02:37 PM   |  A+A-

The Hoodi Halt Station

The Hoodi Halt Station. (Photo | Nagaraja Gadekal, EPS)

Express News Service

BENGALURU: The Prime Minister’s Office has asked the Karnataka Rail Infrastructure Development Enterprises (K-RIDE), the nodal agency for implementing the suburban rail project for Bengaluru, to explore the financial implications of having all train coaches funded by a private firm. This was proposed after a detailed presentation of the suburban rail project, costing Rs 18,621-crore and running 148.17-km, was made by Railway Board Chairman Vinod Kumar Yadav to senior government officials in New Delhi on Thursday, sources said. 

According to the Detailed Project Report prepared by consultancy firm, Rail Infrastructure Technical and Engineering Services, a total of 306 air-conditioned coaches will be required at the time of commencement of the suburban rail project (2026).A source said, “The total cost of the coaches works out to around Rs 2,200 crore. The Prime Minister’s Office prefers the coaches to be funded and maintained by a private firm, on the lines of the Public Private Partnership model adopted in major projects. The impact of infusion of such funding on the profit margins expected from the project for the Railways is what we have been told to examine.”

The project had projected a profit margin of 10.9 per cent for the Railways. “If a firm were to fund the coaches and maintain it for a 30-year period, then the interest that they would expect on the investment would at least work out to 14 per cent,” said another source. This crucial factor needs to be assessed in detail so that the financial implications of the move on Railways can be clear. 

Asked about the time frame this would entail, the official said that K-RIDE will have to send these queries to RITES for examination. “It could take anywhere between 5 days to a week,” he added. Asked about the outcome of the meeting at New Delhi, Union Minister of State for Railways Suresh C Angadi told The New Indian Express, “K-RIDE has been asked to provide some inputs. They will provide them shortly and there will be good news soon on the suburban rail front.”



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