BENGALURU: Just two weeks ago, the much-awaited suburban rail project looked to be firmly on track after Railway minister Piyush Goyal thrashed out all outstanding issues with Chief Minister H D Kumaraswamy. But now it may be months before the Rs 23,000 crore rail link can get off the ground as it was not taken up by the Union Cabinet on Thursday in what is widely believed to be its last meeting before the Lok Sabha elections are announced.
The 161-km railway network cannot make any progress until the Centre’s approval comes through. The project will now be hanging fire until elections are held and a new government gives it a lease of life, say top state government officials. The financial viability of the project came into question, it is reliably learnt.
A highly placed source said a presentation on the project was made by top railway officials to the Railway Board on Wednesday and it was discussed with the Prime Minister’s Office later. “It was supposed to figure in the list of projects to be approved by the Cabinet on Thursday. However, it never made it to the list,” the officer said. Two other sources also confirmed that the project did not make it to the Cabinet for approval.
However, there seem to be differing views on the need to obtain consent from the Union government. Confirming that the suburban rail project was not taken up by the Cabinet, Union Minister for Statistics and Programme Implementation D V Sadananda Gowda said, “It has already been approved by the Cabinet. Now, an MoU has to be signed (between Railways and State) before the project is implemented.”
‘It will take nearly 100 years to get back project investment’
On why the project did not make it to the Cabinet, sources in the Union government said, “The current proposal is not viable for funding. The state has to rework and send the proposal for approval. As per the current proposal, the rate of return on the project is only 1.43%, which is not viable for funding. Once the proposal is reworked, it will come before the Centre.”
Confirming this, an official said, “In simple terms, for every Rs 100 invested in the project, the returns at the end of the year will only be Rs 101.43. At this rate, it will take nearly 100 years to get back the investment made on the project.”
A highly placed source in the state government said that all work related to the project comes to a standstill now. “We cannot take any step forward unless the Centre clears it. It is as good as dead, at least for now,” the official said.“The formation of the Special Purpose Vehicle can be done very quickly. But the Centre’s green signal needs to be obtained first,” another source said.