RailEnquiry

The Indian Railways is set to sign an agreement with the Maharashtra government to build its first elevated rail corridor in Mumbai for Rs 21,000 crore through the country’s largest public-private partnership (PPP) initiative.

“Our officials are in touch with the state government and an agreement will be signed soon,” railway minister Pawan Bansal said.

The State Support Agreement (SSA) is an umbrella agreement that ensures support from the state government for infrastructure projects on issues such as land acquisition. It is a pre-condition for bidders of PPP projects. The agreement is likely to be signed in four weeks.

The Churchgate-Virar elevated rail corridor project, meant to decongest Mumbai’s suburban rail traffic, will be completed in five years and bring relief to 28 lakh commuters.

Given the huge potential, three bidders — GMR Infra, L&T and IL&FS Transportation — have already evinced interest in the project which aims to run a 60km air-conditioned suburban service.

The selected bidder will be responsible for designing, engineering, financing, procurement, construction, operation and maintenance of the project under a long-term concession agreement.

The SSA has already missed a crucial December 31 deadline set by the Prime Minister’s Office.

The project has been in the cold storage for over five years following differences between the Maharashtra government and the Western Railway on the alignment, viability and commercial exploitation of land.

Financial bidding will take place after the agreement is signed with the state. “We are hopeful of awarding the contract this year,” Mahesh Kumar, general manager of the Western Railway, said.

“We are working out details with the state government for signing the SSA with Maharashtra for the project. A final view will be taken on the issue of floor space index for the purpose of commercialisation of available land along the corridor,” Kumar said.

The agreement is crucial to the project as it will involve the state government in shifting utilities, acquiring additional land and other facilities.

Under the terms of the agreement, the railways will allow the private party to utilise land around the stations for commercial development, helping them to recover costs.

Operators are unlikely to make profit if their sole source of revenue is rail fares.

Kumar said 20km of the 60km line would be underground and the rest would be elevated. “We had to change the alignment to minimise the dislocation of some houses due to the project,” he said.