The corporation, a joint venture of the Railway Ministry and state government, will execute the Rs 4,740 crore project under the Mumbai Urban Transport Project-II (MUTP). The MUTP-II is a radical plan which seeks to expand the city's transport network in the next five years beginning next year. The plan comprises 12 suburban rail projects including quadrupling the Kurla-Thane and Borivli-Virar lines and induction of 12-coach rakes.

Speaking at the function, the CM reiterated his demand for a separate rail zone for the city, on the lines of the Central and Western Railway. ``It's not enough to create a corporation.''

Empathising with Mumbai's suffering commuters, the union minister said, ``I have no words to explain how they travel,'' and referred to terms like `crush dense capacity' used to describe rush hourtraffic. The MRVC would make life easier for them, he said.

The railway minister said that the MRVC would raise funds through the commercialisation of railway land and by floating bonds as was done with the Konkan Railway, which could then be ploughed into development projects on the suburban railways.

Later speaking to newsmen, Kumar said that a status paper on the railways would be presented in parliament on Wednesday, two days before the crucial railway budget. The status paper will detail the state of railways in the country, expectations of the people and its challenges.

Today's MoU, the first ever signed by the Railway Ministry with a state government, will lead to the formation of an 11-member board of directors. With a senior railway official as chairman, it will include four members each from the Railway Ministry, the state government and two independent members.

The brief ceremony held at the state government's plush Sahyadri guest house on Malabar Hill was also attended by minister of statefor railways Ram Naik, Deputy CM Gopinath Munde, senior bureaucrats and general managers of BEST and Railways.

According to the MoU, the authorised share capital of the MRVC is Rs 25 crore with 51 per cent equity participation by the Union government and 49 per cent by the state government. While both will pool in equally for the resettlement of slum dwellers displaced due to the suburban rail projects. Funds will be sourced from commercial development of railway land and external borrowings. Additional revenue from surcharge on commuters will be decided by the government and railways after improvements are made in the suburban rail services.