Diamond rail link may tap sovereign funds

Bill for suggested high-speed track link between major metros could be upwards of Rs 12 lakh crore

The new government's big infrastructure project idea, from the poll manifesto of the now-ruling Bharatiya Janata Party, of a 'diamond quadrilateral railway project' to connect all the four metropolitan cities with high-speed rail, could mean a tapping of sovereign wealth funds to finance the mammoth cost, estimated to be at least Rs 12 lakh crore.

A senior official said a preliminary discussion on the project was held recently with a foreign consultant in the Planning Commission, to understand the broad contours. The total length of the rail network has been estimated at 6,500-7,000 km.

"The discussions are at a very preliminary stage and we have directed the foreign consultant who was advising the government on high-speed rail corridors to integrate the existing proposal with the new one," the official said.
 

HIGH-SPEED RAIL

• Govt puts ‘diamond quadrilateral railway project’ on drawing board
• Total length of railway line estimated to be 6,500-7,000 km
• Preliminary talks was held recently with a foreign consultant in Plan panel
• Project might have a structure similar to NHDP
• Initial work for a high-speed rail corridor between Mumbai-Ahmedabad had begun with the previous government

Initial work on building a high-speed rail corridor between Mumbai and Ahmedabad had begun with the previous government signing a joint venture with Japan for feasibility studies. These are expected to over by the middle of 2015.

After the change in government, officials have been directed to merge the earlier programme with the BJP idea.

Officials said as building such an extensive rail network will involve laying new lines at huge cost, the government could also look at tapping sovereign wealth funds. "A project framework similar to the existing National Highways Development Project (NHDP) could be considered," said one. The NHDP was implemented from 1998 under the Prime Ministership of Atal Behari Vajpayee, to upgrade and widen major highways to a higher standard, in phases.

"Unless we have a proper framework and structure in place like NHDP, attracting such huge amount of funds for the ambitious programme could be a big challenge," the official said, adding a proper cost-benefit analysis was needed first.

The Rakesh Mohan committee on transport policy had estimated that investment in railways should rise from 0.4 per cent of gross domestic product (GDP) in the 11th Plan period (2007-08 to 2012-13) to almost 1.1 per cent of GDP in the 15th Plan.