RailEnquiry

New Delhi: Indian Railways has sweetened the preliminary requirement norms for the Rs.21,500 crore Mumbai elevated rail corridor project to attract more bidders. The new request for qualification (RFQ) document offers higher government financing support, raising the viability-gap funding cap to 40% of the project cost, subject to the finance ministry’s approval, from the 20% proposed earlier. Viability-gap funding is a financial support provided by the government to public-private partnership projects in the infrastructure sector to make them commercially viable. The new RFQ also provides for debt financing by state-run Indian Railway Finance Corp. Ltd (IRFCL) and India Infrastructure Finance Co. Ltd (IIFCL) for the project. The financing will be “somewhat cheaper than the ongoing market rate”, said a senior railway official, who requested anonymity. The rail corridor project has been shortlisted by the steering group set up by Prime Minister Manmohan Singh to accelerate infrastructure projects worth Rs.1 trillion. The steering group has set 31 January as the deadline for the award of the contract for the rail corridor project. Indian Railways has also included a separate information memorandum detailing railway land that can be used commercially by the developer, said another government official aware of the development. “This was not presented in the older call for bids,” the official said, declining to be identified. The first official confirmed that 12 plots of railway land will be provided for commercial use. “What railways is trying to do is to put more concrete information in the RFQ to make the project viable and attract more investors to meet the deadline set up by the Prime Minister’s steering group,” said Abhaya Agarwal, partner, infrastructure advisory, at EY Llp in India. The other technical changes to the RFQ include the change in the train car length from 12 or 15 cars to eight and change in gauge from broad gauge earlier to standard gauge. The bidders who had bought the earlier RFQ will not have to pay more to buy the new document which is likely to cost Rs.10 lakh. “The earlier bidders will continue,” said the first official. These bidders include Reliance Infrastructure Ltd, Gammon India Ltd, Larsen and Toubro Ltd, Infrastructure Leasing and Financial Services Ltd, GMR Infrastructure Ltd, and Construcciones y Auxiliar de Ferrocarriles (CAF). The last date for submitting the RFQ has been extended to 20 September from 23 August.