Karnataka: SPV for suburban rail network on the cards

Karnataka: SPV for suburban rail network on the cards

The special purpose vehicle will execute the Rs. 9,000-cr. project and will be discussed in a meeting between State govt. and Railway Minister shortly

The formation of a special purpose vehicle (SPV) for city’s suburban rail network will be discussed in detail at a meeting between the State government and the Railway Minister and other officials scheduled to be held in a few weeks time, City Development Minister K.J. George said here on Thursday.

At a preliminary meeting with Union Minister D.V. Sadananda Gowda, railway officials, and other State government officials, Mr. George said that a draft document for the formation of the SPV — which will execute the Rs. 9,000-crore suburban rail project for the city— has been submitted to the Centre. “We will follow this up with the Centre. One of the bottlenecks with regard to the SPV is the cost sharing ratio and the issue of who would repay the amount borrowed,” Mr. George added.

Currently, the Union government has proposed a 20:20:60 policy in which both Union and State governments would contribute 20% each while 60% of the cost would be raised from loans. While Karnataka is proposing that the repayment of the loans also be split between Centre and State, the Central policy says that the States have to bear the cost of the repayment. “We are also requesting that the fares for the services operated by the SPV be fixed by the SPV itself and not linked to Indian Railways fares. This will help us to avoid operational losses. We will discuss all these issues in New Delhi,” Mr. George said.

Source:The Hindu