Kerala Rail Development Corporation Ltd. (K-Rail), the joint venture of Railways and the State, has initiated steps to mobilise ₹33,700 crore from international financial institutions as loan for the Kochuveli-Kasaragod semi-high speed rail corridor, Silver Line, estimated to cost ₹63,941 crore.
The State has approached the Asian Development Bank (ADB), Japan International Cooperation Agency (JICA), German Development Bank KfW, and Asian Infrastructure Investment Bank (AIIB) for mobilising the loan.
The detailed project report (DPR) prepared by the Paris-based consulting firm Systra, the general consultant of K-Rail, has been forwarded to these institutions.
K-Rail has also given the proposals and feasibility report to these institutions through the Department of Economic Affairs.
The Cabinet had given its the nod for K-Rail to hold consultations with the ADB, JICA, KfW, and AIIB for securing the loan. Already, Railways had given “in-principle approval” for pre-investment activities for the 529.45-km corridor.
“As the government order had been received, the DPR and alignment of Silver Line will be forwarded to the Ministry of Railways on Monday for further clearances,” Managing Director, K-Rail, V. Ajith Kumar said.
The cash-strapped Railways will have to provide ₹3,125 crore (4.89%) of the estimated cost and the State ₹3,253 crore (5.09%). Private equity of 6.65% is expected to mobilise ₹4,252 crore. The State will also have to bear the cost of acquiring 1,226.45 ha of land for laying the line in 11 districts, estimated at ₹11,837 crore (18.51%).
The subordinated debt (GST) of the Centre will come to ₹3,189 crore (4.99%) and that of the State ₹2,896 crore, which will be 4.53% of the estimated project cost.
Green bonds an option
Floating green bonds is also under consideration. Green cess and value capture financing, a mode of public financing that acts as a tax collection mechanism and aims to recover part or full of the value that public infrastructure generates for private landowners, are the other options.
Private equity, especially from Non-Resident Keralties, is being looked into based on the inflow of investments that has poured in for the Cochin and Kannur airports.
