NOVEMBER 12: After years of unending talks on the Mumbai Urban Transport Project (MUTP-II), the state cabinet today approved `in principle' the setting up of the Mumbai Rail Development Corporation (MRDC), a prerequisite for getting the crucial World Bank loan for the nearly Rs 7000-crore project.

The project, to be implemented by the MRDC, is a joint venture between the state government and the Indian Railways who are expected to sign the memorandum of understanding (MOU) soon. Its features include commercial use of railway stations, development of railway lands - money generated from which will be used for rail projects across the country, additional surcharge on users of the Mumbai suburban railway system, among others.

The MRDC will also implement the rehabilitation of the project affected people (PAP) mostly living along the tracks. Addressing the press after the cabinet meeting, the Chief Minister stated that a third of the money generated will be used for the city's rail tracks, a third for the rest of Maharashtra and the rest will be used for the rest of the country.

The MOU also proposes an additional surcharge for the users of the Mumbai suburban railway system, though the rates have not been decided as yet. The CM informed that the rates will be decided by both the state government and the railway officials. The surcharge will be levied from April 1, 1998, or three months from the formation of the MRDC, whichever is later. The state government and the railways will participate in the initial equity of Rs 25 crore in the ratio of 49:51 per cent respectively. This is expected to obtain funds to the tune of Rs 4,900 crore for the railway projects. Around Rs 900 crore has been allocated for the roads and buses and Rs 470 crore for the rehabilitation of the project affected people.

The MRDC will be a railway company under the Indian Railway Act 1989 owned solely by the government under the Company's Act, 1956. It will have an ex-officio chairman and six permanent directors. With 65 per cent of the loan expected from the World Bank, the rest of the funding for the railway project will be shared by the state and the Central governments.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.