When the Maharashtra government and the ministry of railways joined hands for setting up the Navi Mumbai metropolitan railway project, it was hailed in official circles as a model of the pro-active role that state governments can play in reducing congestion in major cities while providing cheap and environment-friendly transport to its citizens.
But, two months after the announcement of the Maharashtra government-Indian Railways project, new doubts have now arisen about the financial viability of the venture. The doubts are being raised in light of the financial difficulties being faced by Konkan Railway Corporation (KRC) which is the other railway project in which the Maharashtra government is involved in.
KRC is facing a serious challenge in paying interest and redeeming some of the bonds it placed earlier to raise money. The cost...
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of debt servicing and redemption for KRC works out to Rs 250 crore this year and, sources say, it will be in serious problems if the Indian Railways does not bail it out. The difficulties in servicing debt is because it has not been able to attract sufficient freight business although it is doing well on the passenger segment of the business.