With the State getting ‘in-principle approval from Railways for pre-investment activities’ for the 531.45-km Semi-High Speed Rail (SHSR) line from Kochuveli here to Kasaragod, steps are being expedited to mobilise external funds for the project estimated at ₹66,079 crore on completion in 2024.
Kerala Railway Development Corporation Limited (KRDCL), the special purpose vehicle set up to execute viable projects on 51:49 cost-sharing basis between the State and Railways, has moved ahead to seek aid from the Japan International Cooperation Agency (JICA) once the Paris-based consulting firm Systra found that the third and fourth lines are ‘feasible and economically viable’.
The government had even approached the country office of JICA through the Union Department of Economic Affairs to secure ₹34,000 crore as loan.
Systra, general consultant for the KRDCL, has suggested in the feasibility report that the State and Railways mobilise ₹10,000 crore each.
The State, in addition, will have to bear the cost of acquiring 1,226.45 hectares in 11 districts.
The State is now looking into various other external funding agencies to mobilise funds in view of the financial crisis in the State and Railways. Funds from the Asian Development Bank, German Federal Development Bank KfW, Asian Infrastructure Investment Bank, and Modern Development Bank are being sought and will be availed if found attractive, official sources told The Hindu.
Green bonds
The KRDCL has signed an MoU with the IIM Ahmedabad to look into options to float green bonds. Based on the report from the IIM, the KRDCL and the State will decide whether to float green bonds globally.
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 being looked into.
Private equity, especially from Non-Resident Keralties, is being looked into by the KRDCL based on the inflow of investments that has poured in for the Cochin and Kannur airports. The SHSR will be showcased at the two-day ASCEND 2020 global investors meet slated to be held in Kochi next month.
The KRDCL is also looking forward to the detailed project report from Systra early next year as the government announced in the budget that the work on the rail lines will begin in 2020.
