The Railway ministry has swung in favour of offloading the remaining 26 per cent stake in Railtel venture to its Indian Railway Finance Corporation (IRFC) instead of keeping it as a public sector unit under the department of telecommunications (DoT).
While no final decision has been taken on the issue, high level sources in the ministry said the talks with DoT has remained inconclusive so far. MTNL or BSNL was supposed to pick 26 per cent of the equity in Railtel as part of the proposal that had been tentatively hammered out between the Railways and DoT initially.
But if the IRFC route is implemented, the total stake of the railways' financing company in Railtel would climb to 36 per cent and would make the latter fully owned by the Railways.
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At present, while the Railways own 51 per cent of the equity in the company, another 15 per cent is with the other railway PSUs -- with IRFC holding the largest chunk at 10 per cent and Concor and Ircon holding 2.5 per cent each of the total Rs 1,000 crore equity.
But talks have got deadlocked on the issue whether the Railways or the telecom department would have management control in the company that will have control over a nationwide optical fibre link using the right of way besides the railway lines.
DoT has demanded that they should be allowed to run the company claiming that they are in a better position to market the linkage to the telecom companies who would benefit from such a backbone.
But the Railways have baulked at it. The sources said Railways are not satisfied with the working of the DoT on the existing signal network maintained by the Railways. Meanwhile, Rail Bhawan says 65 per cent of the work of laying of the cables along the railway tracks have been completed with about 12,000 kilometers network already in place.
As part of the equity, the Railways have also transferred about Rs 300 crore of assets to the new corporation. This includes optical fibre cables, microwave towers and the right to use the railway land to lay the cables.
The corporation is in talks to operate as a national long distance operator and even apply for an international long distance licence to open Internet facility in the captive markets of railway platforms.