Reckoning that the Rs 22,500-crore Oval Maidan-Virar Elevated Rail Corridor project was stuck, the Ministry of Railways has decided remove the spoiler of private land acquisition and simultaneously sweeten the deal for prospective bidders by extending funding options through its finance arm, the Indian Railway Finance Corporation (IRFC). The Railways issued a fresh Request For Qualification (RFQ) Wednesday estimating award of bids by December 31.
An extension of the underground portion between Santacruz and Vile Parle to Bandra Terminus has been proposed to minimise private land acquisition. Further, to provide lending comfort to prospective bidders, IRFC has been roped in. The Railways now expect to attract more bidders for the project entailing a 63-km long railway corridor.
After elaborate meetings, the Ministry of Railways and the Planning Commission have decided to bring in more clarity in the project and make it more attractive to prospective bidders, said Arunendra Kumar, member (mechanical) and Chairman Railway Board (additional charge).
To make the project more attractive, the Railways has now decided to extend soft loans carrying 2 per cent interest in addition to the central governments 20 per cent Viability Gap Funding. The loan quantum will be the lower of the following three: 10 per cent of total project cost, 75 per cent of equity of the concessionare (bidder who is awared the contract) or Rs 3,000 crore. The option of IRFC providing loans for procurement of rolling stock has also been included in the new RFQ. However, IRFCs involvement is subject to approval by its Board of Directors.
A railway official said, Prospective bidders had conveyed their apprehension about financing the project. Therefore, it was decided to make the project financially more viable for bidders.
According to railway board sources, the underground portion between Santacruz and Vile Parle has been extended up to Bandra Terminus to avoid acquiring a private land parcel. While this will escalate the cost of the project to start with, officials said, it will expedite implementation. Land acquisition has often been debated in meetings held between WR and the state government this year. With these meetings lending little or no clarity, the State Support Agreement (SSA) crucial for the project has not been signed yet.
Sources in the government said lack of response from bidders for a mega project like Mumbai Trans-Harbour Link in Mumbai recently compelled the railway ministry and the plan panel to make the WR project more