Uncertainty over rly projects in Bihar

PATNA: With Lalu Prasad out and Mamata Bannerjee in as the new railway minister, uncertainty looms large over the fate of railway projects
in Bihar.

Reports suggest the Railway Board is looking to the new minister for a fresh call on the proposal to set up a diesel locomotive factory in Saran and another electric locomotive factory in Madhepura in Bihar at a cost of about Rs 3,000 crore.

With Lalu at the helm, sources said, the Railway Board had announced that the railways would not build these factories under public-private partnership (PPP) basis. They were to come up instead as departmental production units (DPUs).

However, the Railway Board is learnt to be toying with the original PPP plan, pleading fund crunch. "The final call would of course be taken by the new minister," a Railway Board official said.

The official recalled the railways had originally planned to set up these ambitious factories in Bihar as joint ventures (JVs) in collaboration with international firms. While the railways was supposed to hold 26% equity, the rest was to be brought in by private partners. However, at the time of actual bidding for the electric locomotive factory, only one firm applied. The railways subsequently decided to develop the factories as DPUs.

However, the railways would have to seek a fresh approval from the Union cabinet for reverting to PPP for the two projects. If the cabinet gives its nod, the railways would acquire land for the JVs and give them to the private partners on lease for about 30 years for 8% annual charge of the total cost of the land, the sources said.

As of now, the railways has not acquired land for these factories.