Ranchi, Sept. 4: Transport minister C.P. Singh has finalised the contours of a joint venture company that is to be set up for executing nine new rail projects across Jharkhand and passed on the proposal, framed according to a decision of the railway ministry, to chief minister Raghubar Das for his consent.

Survey work has already been completed for eight of the new lines, namely, Tori-Chatra, Lohardaga-Gumla-Korba (Chhattisgarh), Lohardaga-Gumla-Simdega, Namkum-Kandra (Adityapur), Ranchi-Kandra, Ranchi-Rajkharsawan, Muri-Chandil and Giridih-Jhajha.

Survey work is still on for the proposed Hazaribagh Town-Chatra-Garhwa Road rail line.

As per the decision of the railway ministry, henceforth all projects would be executed by forming JVCs - with states holding 74 per cent stake and the railways 24 per cent - after which existing MoUs with the ministry would be non-functional.

For Jharkhand, sources in the state transport ministry said, the JVC would have an authorised share capital of Rs 200 crore, of which Rs 100 crore would be initial paid-up capital. The funds would be proportionally shared by the railway ministry and state government.

Thereafter, a JVC shareholder agreement would be inked and the original MoU with the railway ministry will cease to function.

"I forwarded the proposal to the chief minister for approval on August 26, an hour or so after it was put up before me. Now, it depends on the chief minister to approve it immediately or take a look at similar agreements inked by other states," said minister Singh, who is in- charge of all new railway projects of the state.

"All I want is to ensure that Jharkhand is able to enjoy better rail connectivity at the earliest," he said.

The JVC for Jharkhand, with its headquarters in Ranchi, will be responsible for the execution of the new railway projects. It will also have the option of setting up project-specific subsidiary companies or special purpose vehicles (SPVs).

Once a particular project is approved by Railway Board, a 30-year concession agreement would be inked between the railway ministry and the SPV. Under this agreement, the state is to provide required land while the railways will be responsible for operation, maintenance and extending last mile connectivity. All expenses would be taken care of by the project SPV.

Project SPVs are free to secure loans from banks, multi-lateral agencies and financial institutions and they will be responsible for repaying the loan during the concession period. In case of loss making SPVs, the diluted losses would be shared proportionally by the stake-holders. And, if the railway ultimately takes over a loss-making project SPV, it will not bear the accumulated losses.

"In Jharkhand, we have had horrible experiences. The state government does not provide us land on time and persons involved in execution of projects are doomed to fend for themselves due to poor law and order. Still, we are being held responsible for delays and cost escalations. Under the new arrangement, the Jharkhand government will have to shoulder a bigger responsibility," explained a senior Railway Board official.

There are six ongoing rail projects in Jharkhand, which are to be completed by March 2017 as per an MoU Railway Board signed with the state government on February 19. The revised cost for the six projects was Rs 5,775 crore. The Railway Board official said that although the project costs were being shared equally by the state government and the railway ministry, the ownership rights of the acquired land would be with the railways.

The six ongoing projects are: Koderma-Hazaribagh-Barkanana-Ranchi, Ranchi-Lohardagga-Tori, Koderma-Tilaiya (Bihar), Koderma-Giridih, Deoghar-Dumka and Dumka-Rampurhat.

While the two Deoghar lines were almost complete, the Koderma-Hazaribagh stretch is complete and passenger trains are already running on the route. Work is on in the Hazaribagh-Barkakana-Ranchi stretch.

The Ranchi-Lohardaga stretch is also complete, while work is on the Lohardaga-Tori stretch. In the Koderma-Giridih project, passenger trains have already started running up to Kanwar in Saria block of Giridih district. Another 60 km stretch needs to be completed. Ground work on the Koderma-Tilaya (Bihar) project is on, but slow.

According to ministry sources, Railway Board executive director (works) V.P. Dudeja has been holding a series of meetings with senior officials of various states clarifying the new policies for executing new projects.

During his meeting with Jharkhand transport secretary Ratan Kumar on August 19, he is understood to have told him that 17 states had already approved the idea.