The Hindu Business Line : Development of Golden Quadrilateral — Rlys to earmark incremental receipts for debt servicing

THE Railway Ministry will earmark incremental receipts to the extent of debt servicing requirement over the amortisation period of the projects being developed to strengthen the high-density Golden Quadrilateral as part of the National Rail Vikas Yojana (NRVY).

"This arrangement will give a big comfort to the lenders and enhance the credit-worthiness of projects thereby enabling Rail Vikas Nigam Ltd, the special purpose vehicle set up by the Railways for implementing the NRVY, to raise debt at competitive rates from the market," a top Railway Ministry official said.

This arrangement will, however, be limited only to the financially viable projects taken up by the SPV for strengthening the Golden Quadrilateral connecting the four metros of Delhi, Mumbai, Kolkata and Chennai.

This is for the first time that the Railways have decided to set aside incremental receipts for debt servicing of projects implemented through a SPV set up with private sector participation.

The arrangement also removes a major hurdle faced by private investors in undertaking railway projects in the absence of a mechanism to recover user charges as the revenues earned by the Railways flows into the Consolidated Fund of India.

It was for this reason that the Railways had to alter its build, operate, lease, transfer (BOLT) scheme which now envisages a tripartite agreement between the Railways, financial institutions and the private developers.

The National Rail Vikas Yojana involves strengthening of the Golden Quadrilateral and its diagonals to enable the railways to run more long distance mail/express trains and freight trains at a higher speed of 100 km per hour, augmenting rail connectivity to ports and development of multi-modal corridors to hinterland and construction of four mega bridges.

The projects being developed under the Yojana are proposed to be funded through multilateral agencies such as the Asian Development Bank (ADB), the World Bank, domestic financial institutions, public-private partnerships and budgetary support.

The Yojana is estimated to cost over Rs 15,000 crore.

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Development of Golden Quadrilateral — Rlys to earmark incremental receipts for debt servicing