New firm to take up 4 projects

By Our Special Correspondent

NEW DELHI, Sep. 20. In a pioneering effort to beat shortage of funds, the Ministry of Railways and the Karnataka Government today formally agreed to float a joint venture company for implementation of railway infrastructure projects in the State. The Railways is to sign a similar MoU with Andhra Pradesh soon.

Called "Rail Infrastructure Development Corporation (Karnataka) Limited (K-RIDE)", the new company would, to begin with, take up four pending projects -- a new line between Hubli and Ankola, gauge conversion of Solapur-Gadag and Hassan-Mangalore sections and doubling of the Guntakal-Hospet line. The projects are estimated to cost Rs. 991.91 crores, Rs. 265.77 crores, Rs. 217.82 crores, and Rs. 164 crores, respectively.

The company will initially have an authorised share capital of Rs. 60 crores, split into six lakh shares of Rs. 1,000 each. The Railways and the Karnataka Government will each have a holding of 26 per cent, and the balance will be made up of subscriptions from financial institutions, banks and other agencies.

Speaking at a brief function where the MoU for floating the company was signed, the Railway Minister, Ms. Mamata Banerjee, said a similar agreement was to be entered into with Andhra Pradesh on September 23, and appealed to other States to follow suit. Financial support to the Railways from the Central exchequer had been gradually going down over the past few years, making it difficult to fund developmental projects that were required for capacity expansion and fulfil the aspirations of rail users, she added.

The Chief Minister, Mr. S.M. Krishna, hoped that a similar joint venture would be soon floated for funding a circular railway project in Bangalore. Bangalore was growing in international importance, and there was an urgent need to improve its infrastructure, he added.

Today's agreement comes at the end of months of discussions between the Railways and the Karnataka Government. Finishing touches were given as late as in the early hours of today. Mr. Krishna disclosed that an agreement between the Railways and the State Government to share profits or loss of the new company equally, was only reached last night.

The Union Tourism Minister, Mr. Ananth Kumar, highlighted the importance of railways as the most cost-effective and environment-friendly mode of transport, and hoped greater emphasis would be laid particularly on strengthening the rail link between Bangalore and Mysore.

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Section  : Southern States
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