Delay in cost-sharing rail projects escalating burden on State govt

Poor share in Rly budget chief cause; Rs 3K cr addl cost from 12 projects
Last Updated 06 August 2015, 20:23 IST

The delay in implementing the cost-sharing railway projects on the part of South Western Railways (SWR) has proved to be a big drain on the State exchequer.

According to an estimate on the cost escalation done by the Infrastructure Development Department (IDD), additional financial burden on the State government due to the delay in implementing 12 cost-sharing projects is about Rs 3,000 crore. The cost of many of these projects, some of which were taken up almost two decades ago, is most likely to escalate further.

Of the 12 projects, two were completed recently – Kadur-Chikkamagaluru and Kottur-Harihar (both new lines). But they are yet to be commissioned due to technical and legal problems. While five of them are still in the initial stages, work on the remaining five projects, including Ramanagara-Mysuru (doubling) and Hassan-Bengaluru (new line), is progressing at a snail’s pace.

The cost of many of these projects has increased by three to four times against the initial estimate. The project implementation is so slow that work on some of them began in 1997, but is still incomplete. The total escalation in cost of the five ongoing projects is about Rs 2,743 crores – it has increased from Rs 2,005 crore to Rs 4,748 crore. The five projects are as follows: Ramanagara-Mysuru (doubling), Hassan-Bengaluru, Bidar-Kalaburagi, Munirabad-Mahbubnagar and Kolar-Chikkaballapur (all new lines).

The IDD has estimated that the cost of the five projects which are in the initial stages is likely to increase to Rs 4,000 crore from the initial estimate of about Rs 2,000 crore. The burden on the State government due to the escalation in cost of these projects is about Rs 1,700 crore. The SWR and the IDD are yet to conduct a detailed study of cost estimation of these five projects, official sources in the IDD said.

The ratio of cost sharing between the State government and the Railways varies for each project. Many of the projects are taken up on 50:50 cost-sharing basis.

The State has agreed to share the project cost, over and above the cost of acquiring land. The intention behind sharing the cost was to ensure that these projects are completed as soon as possible.  One of the main reasons for the delay in implementation on the part of SWR is inadequate allocation to the State in the Railway budget. So, the State, which was eager to see its projects completed on time, offered to share the project cost with the Railways, the sources said.

This apart, the government has already agreed to share the cost of 10 more railway projects, including Bengaluru-Chamarajanagar, Chikkamagaluru-Sakaleshpur and the Kolar coach factory - work on which is yet to be taken up. The State government’s share of these projects is estimated to be Rs 5,475 crore. When contacted by Deccan Herald, Minister for Infrastructure Development Roshan Baig said that the government had been mounting pressure on SWR to speed up the project implementation. Only the Railways would be able to tell why projects were getting delayed, he said.

(Published 06 August 2015, 20:23 IST)

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