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Monday, October 23, 2000

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Germany-aided Rlys project set to go on track soon

Hema Ramakrishnan

NEW DELHI, Oct. 22

THE Railway Ministry is set to utilise the 185-million-Deutsche mark loan sanctioned by the German Bank, KFW, for modernisation of the signalling systems on the Delhi-Kanpur section, following the submission of a fresh design and feasibility report on th e project by De-Consult.

Official sources said that the consultant has recommended changes in the scope of the project. Both KFW and the Railway Board have been appraised of the issue. The work on the project will commence as soon as the board gives the go-ahead.

Both the Prime Minister's Office (PMO) and the Finance Ministry had pulled up the Railways for its failure to use the bilateral loan, which was sanctioned nearly three years ago.

In the normal course, bilateral loans are routed through the Finance Ministry, which bears the interest burden, commitment and other charges. It is then channelised as budgetary support to the Railways.

The 185-million-Deutsche mark loan (roughly Rs 420 crore) carries an interest of 0.75 per cent per annum, with repayment over forty years.

The agreement stipulated payment of annual commitment charges of 0.25 per cent (around Rs 1 crore) three months after signing the agreement.

With the Finance Ministry coughing up the commitment charges, the Railways has been under pressure to implement the project.

The Railways, in fact, proposed that KFW should consider waiving the commitment charges till the consultant firms up a fresh design for the project on the high-density Delhi Kanpur section.

The proposal was, however, turned down and the Finance Ministry continued to pay the commitment charges.

De-Consult _ which bagged the initial consultancy contract with RITES _ was also mandated to examine the financial viability of the project with the change in technical parameters.

The consultant is understood to have made an assessment of parameters such as increase in line capacity and improvement in safety.

The project was mired in controversy right from 1997 as the Railway Board had given the go-ahead without the approval of the then Railway Minister, Mr Ram Vilas Paswan.

It was subsequently re-evaluated by a technical committee during the tenure of his successor, Mr Nitish Kumar. The project also came under the scrutiny of the Comptroller and Auditor General of India (CAG).

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