Bengaluru suburban rail project finds Private funding of coaches useful

It has also recommended that exploring the Special Public Entity for the funding and considering it as a backup option can also be possessed and its set to propose the detailed report in a while.

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BENGALURU (Metro Rail News): After directive provided by the PM’s Office to explore the private funding options for the maintenance of the trains for the Bengaluru suburban rail project, the Karnataka Rail Infrastructure Development Enterprise the Nodal Agency has undertaken a detailed study to investigate that if PPP is possible and the result is feasible to have private funding of the coaches and that it will have a marginal impression on the profit margin of the railways.

It has also recommended that exploring the Special Public Entity for the funding and considering it as a backup option can also be possessed and its set to propose the detailed report in a while.

Railway Board Chairman Vinod Kumar Yadav offered the total funding of the suburban rail project to be Rs 18,621 Cr for 148.17 km where a complete of 306 ac coaches would be needed at the time of the beginning of the suburban project. “The entire expense of the coaches works out to around Rs 2,200 Cr. The PM’s Office then directed that the coaches be funded and maintained by a private firm, on the lines of the PPP model adopted in major projects”, stated sources.

Private funding will decrease the entire expense of Rs 18, 621 cr to Rs.15, 767 cr as per the sources. The expense of funding coaches as per 2025 prices is expected at Rs 2,785 cr with the coaches being leased for 30 year period to the leaser.

Though we can expect that the completion to take place by 2026, the original deadline specified in the Detailed Project Report has been maintained. During the ear of launch, the number of coaches has been named as 306 in the original DPR.

Considering the critical appraisal of the Private assistance for the coaches and if the coaches would be secretly funded then the internal cost of return that was earlier 10.99% now would be 10.74%.

This report has also declared that the expense of borrowings from the govt that was 8-9% earlier would raise up to 12% below the private leadership. The report also declared that Delhi was also looking forward to the PPP for line-5 but gave up because of the huge prices involved.

The govt may adopt the PPP model for the funding of coaches but they have to take the help of SPV proposal into consideration, further added.

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