Railtel, the new broadband subsidiary of the Railways, has chalked out a plan to speed up the process of building its network and is planning to spend more than Rs 750 crore in laying over 5000 km of optical fibre cable (OFC) during the current fiscal itself.
"We cannot wait for the Railways to lay their network. We would accelerate the process so that we have a large network in place as soon as possible and can become significant players in the market in the near future," a senior Railtel official said.
The company is in the process of negotiating term loans from different agencies and plans to raise about Rs 450 crore from the market as soon as possible. "We are in talks with all leading financial institutions and hope to have the finances in place soon," the official said.
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Marking a break from its mandate, the Indian Railway Finance Corporation (IRFC) has already agreed to provide a Rs 200 crore soft loan. The rate of interest, tenor and other details of the loan are being worked out with IRFC, but the in-principle clearance has come through following a directive from the ministry, he said, adding, the money would be spent by December itself.
IRFC, which raises money to finance rolling stock for the Railways, may also pick up equity stake in its sister concern, he said.
The official clarified that the loans would be over and above the equity capital which the company expects by offloading 49 per cent equity (authorised capital being Rs 1000 crore) in favour of the department of telecom and Railway ministry PSUs.
Even the Railways are anxious that Railtel gets started with commercial operations as soon as possible as they are banking on the company to generate funds to help them take care of the growing gap in their revenues and expenditure.
The Railways would need barely 15 per cent of the broadband capacity themselves and the rest would be offered by Railtel for outside users for a fee. Railtel is expected to soon apply for IP-II (infrastructure provider) and ISP (Internet Service Provider) licenses and aims to become an NLDO (National Long Distance Operator) in the long run.