NEW DELHI, May 7: The Maharashtra government and will sign an MoU with the ministry of railways to set up Mumbai Railway Development Corporation (MRDC) to improve the suburban railway-cum-road transport network.

The decision is being considered significant in view of the World Bank threat to cancel the promised Rs 3500 crore assistance for the project.

Though both the state government and ministry of Railways have decided to pursue the Wrold Bank to restore the assistance, a decision has been taken to proceed with it even without any assistance.

The corporation would be constitued on the pattern of the Konkan Railway Corporation. The state government and the ministry of railways would be holding 50 per cent equity each and would mobilise resources to build new line capacity and related infrastructure for improving the Mumbai suburban railway network.

Maharashtra chief minister Manohar Joshi during a meeting with Railway Minister Ram Vilas Paswan agreed to the proposal. They also agreed to formalise the organisation of the MRDC in two months, a Maharashtra government official said.

The MRDC's primary objective would be to develop the network in the Mumbai metropolis.

It would also exploit commercially air space and other railway land to mop up resources for the Mumbai suburban railway, the sources said. However, the operations operations and maintenance of the suburban railways would continue to be vested with Central & Western railways.

Earlier, the World Bank had agreed to extend a soft loan of Rs 3500 croe for the Mumbai urban transport phase-II. But in March, the WB sent a communication threatening its cancellation.

The Maharashtra Chief minister was assisted by Deputy chief minister Gopinath Munde and two MPs Ram Naik and Ram Kapse and the railway minister by the chairman, members and other officials.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.