State has to clear a host of hurdles to ink tripartite agreement for Sabari rail

The agreement involving the State, Railways, and RBI requires that if the State fails to pay its share of cost the RBI will pay the amount to Railways and deduct the amount from the Central aid to State for various schemes 

The State government’s willingness to sign a tripartite agreement has raised hopes of the long-pending Angamaly-Sabari rail project becoming a reality. However, the State will have to clear many hurdles to bring the project on track. The tripartite agreement involving the State government, the Ministry of Railways, and the Reserve Bank of India (RBI) will require that if the State fails to pay its share of project cost on time the RBI will pay the amount to the Ministry of Railways and deduct the amount from the Central share of assistance to Kerala for various schemes. 

The State is planning to raise its share of funds for the project, which will come to ₹1,900 crore, from the Central loan for States to develop infrastructure. The Centre had announced 50-year interest-free loans on a long-term basis to help States develop their infrastructure. In the event of a delay in getting the share of this Central loan, the RBI will pay the State share to the Ministry of Railways by deducting the same from the Central assistance to Kerala, said a senior officer. 

Other conditions

There will also be a host of conditions for the loan for infrastructure development to materialise, including branding of the project as mandated by the Centre, which Kerala had been resisting for some time. The State has now directed the Kerala Rail Development Corporation Limited (KRDCL), a joint venture between the State and Railways for executing viable projects on a cost-sharing basis, to prepare the agreement on the line of similar pacts signed by States such as Maharashtra.

The State will have to give to the Centre a copy of the agreement and a letter expressing its willingness to give its share of fund on time to Railways. Once the Central Committee of Economic Affairs approves the proposal, the agreement can be signed.

Why the agreement

The State decided to go for the tripartite agreement after its request to the Centre to exempt the project cost from the State government’s borrowing limit evoked no response. If all these conditions are materialised, the project conceived in the 1997-98 period will be on track.

The revised cost of the project, which is chiefly for providing a rail link to Sabarimala, is around ₹3,800 crore. The project will bring the high-range areas of Kerala onto the rail map. As per the agreement between Railways and the State, Kerala will have to share half the project cost. 

Published - October 26, 2024 08:45 pm IST