MUMBAI, May 7: The Maharashtra State Road and Bridges Development Corporation (MSRDC) will sign a memorandum of understanding with Indian Railways Construction Corporation (Ircon) for building a 17 km six-lane road between Khandala and Lonavala ghat region costing Rs 250 crore.

The project is part of the Rs 1,500-crore 84-km expressway between Kon and Dehu Road on the Mumbai-Pune section. Sources at Mantralaya told The Financial Express that the memorandum was expected to be signed within a week as both parties have already had final talks.

This is for the second time that the corporation and Ircon have entered into an memorandum for road construction. The first one pertained to building rail over bridges at an investment of over Rs 400 crore in various parts of the state.

The corporation will float separate tenders in July for the construction between Kon and Khopoli, Lonavala and Dehu Road. The eventual awarding will be done by the end of September.

Work is likely to start in early October. The government had deferred the foundation laying ceremony twice as it was awaiting environment clearance from the Centre. This is expected by the end of this month.

The state decision to assign the construction to the corporation raised eyebrows as this was a fallout of the bid by Reliance-led consortium, that was turned down. Reliance had quoted Rs 2,400 crore for the 84-km expressway and another Rs 1,200 crore for real estate development.

In a related development, the railways ministry and the state government have agreed to set up the Mumbai Railway Development Corporation (MRDC) in two months for developing the network in the city.

An agreement was finalised between railway minister Ram Vilas Paswan and chief minister Manohar Joshi here on Tuesday. The corporation, to be set up on the pattern of the Konkan Railway with 50:50 equity participation, would mobilise resources and build new lines and related infrastructure. It is intended to improve the city's suburban railway network.

It would also commercially exploit air space and other railway land to mop up resources for the suburban, sources said.

The state government and the ministry will also sign a memorandum of understanding in two months on the constitution of MRDC. Operations and maintenance of the suburban railways will continue to be vested with the central and western railways.

Both parties have decided to persuade the World Bank not to cancel the proposed loan of Rs 3,500 crore for the Mumbai Urban Transport phase 2. In March 1997, the Bank had threatened to cancel the loan.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.