Loan repayment fund for MUTP on cards

The government is in the process of creating a Loan Repayment Reserve Fund - Mumbai Suburban Rail System for servicing of debt of Rs 3,125 crore for the Mumbai Urban Transport Project (MUTP).

For the proposed fund, the cost of the MUTP will be recovered by levy of MUTP surcharge, which has been imposed from September 15, 2003, from the public using the Mumbai Suburban Rail System, an official release said today.

The proceeds of the revenue generated from the levy of this surcharge will be shared on a 50:50 basis between the railway ministry and Maharashtra, the release said.

The railways' share of the proceeds from MUTP surcharge will be passed on to the ministry of finance towards World Bank loan repayment charges.

In the event of slippage or shortfall in any particular year, the ministry of railways will service the loan through its own budgetary resources.

The proposed fund will keep proper account of surcharge and payment to the ministry of finance towards servicing of the loan. The MUTP envisages upgradation of the rail infrastructure in Mumbai to increase its transport capacity and reduce the overcrowding in the suburban rail system.

The World Bank has provided funds to the extent of 50 per cent of the cost partly as a loan and partly as a credit. The repayment period for the loan and credit, along with interest and service charge, is 20 years and 35 years respectively, it added.