The SilverLine semi-high-speed rail project is not on the funding list of the foreign funding agency Japan International Cooperation Agency (JICA) since the Centre has not given final approval for the project. In 2018, the project was included in the JICA ODA rolling plan, which includes projects to be implemented with JICA funding, for an amount of ₹33,202 crore. Now, the project has been reportedly excluded from the rolling plan.
However, during a discussion between JICA and the Department of Economic Affairs (DEA) in 2020, JICA had suggested co-financing the project along with other agencies. Accordingly, K-Rail, the joint venture company with Union Railway Ministry and the State government, which executes the project, forwarded new loan proposal documents, also including Asian Development Bank (ADB), Asian Infrastructure Investment Bank (AIIB), and KfW (German financial cooperation programme). The move had the approval of the Department of Expenditure, NITI Aayog, and Railways.
However, a screening committee meeting held in February 2021 sought an undertaking from the State government regarding debt repayment that the entire debt for the project will be serviced by the project’s special purpose vehicle (SPV).
State govt.’s undertaking
If the SPV (K-Rail) makes financial losses, it will be borne by the shareholders of the SPV. The Kerala government had then given an undertaking shouldering the loan liability.
Thereafter, the Department of Economic Affairs (DEA) sought details regarding the technical and financial viability of the project from Railways. It was mentioned that the project was yet to be approved and was being appraised by the Railway Board. Hence, any financing agreement with JICA, ADB, AIIB, and KfW may be entered into after approval of the project by the Union government.
V. Ajithkumar, K-Rail managing director, told The Hindu, “If the project was excluded from the list of the rolling plan of JICA, the Centre should have informed K-Rail. The Centre may have excluded it when JICA insisted on co-financing. The loan proposal will be forwarded to these institutions concerned once approval is accorded to the project by the Centre.”
Info on website
However, the DEA website still shows that the project is included on the rolling plan of JICA. The project envisages travelling at a maximum operational speed of 200 km/hr to cover the State from north to south in four hours. The DPR of the project has estimated a cost of ₹63,941 crore with a debt component of ₹33,700 crore.
