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Safety-related projects to get boost -- Railways to step up investments

Hema Ramakrishnan

NEW DELHI, Feb. 21

THE decks have been cleared for the inclusion of a Rs 420-crore safety-related project in the ensuing Rail Budget, following the Railway Board's decision to finally draw the KFW loan sanctioned to it in 1997.

Officials said that both the board and KFW have accepted a fresh design and feasibility report on the project -- involving modernisation of the telecommunications system on the Delhi-Kanpur section -- prepared by De Consult.

A formal agreement, incorporating changes in the scope of work, will soon be signed between the two parties. The 185-million-Deutsche Mark loan, carries an interest of 0.75 per cent per annum, with a repayment spread over 30 years. It will be routed as b udgetary support from the Exchequer.

``With pressure mounting on the Railways to step up investments in safety-related works, the board has decided to draw the loan and commence work on the project as soon as the formalities are completed,'' said a senior official.

The Finance Ministry has, over the last three years or so, been forking out commitment charges as per the original terms of agreement. However, the loan was not utilised as work on the project had been frozen.

The signalling project was mired in controversy right from the start as the Railway Board had given the go-ahead without the approval of the then Railway Minister, Mr Ram Vilas Paswan.

It was subsequently re-evaluated by a technical committee during the tenure of his successor, Mr Nitish Kumar. The project also came under scrutiny by the Comptroller and Auditor General of India (CAG).

De-Consult -- which bagged the initial consultancy contract with RITES -- was once again mandated to examine the financial viability of the project with the change in technical parameters.

The Railway Ministry had even proposed that the KFW should consider waiving the commitment charges till the consultant gives its report. The proposal was, however, turned down and the Finance Ministry continued to pay the commitment charges.