KRC plans to seek $ 40 m more
18 December 1996 23:20 IST In addition to the $ 70 million borrowed earlier from the Bank of America, the Konkan Railway Corporation Ltd is planning to seek $ 40 million more, to put an end to its financial crisis.
The unbearable delay in the completion of the 760 km-long Konkan railway line and the external commercial borrowings would now cost the total project to over Rs 3000 crore, against its original estimated cost of Rs 1800 crore.
The KRCL had earlier claimed that the foreign loan and newly issued Rs 150 crore tax free bonds would solve its financial crisis for ever. But as commissioning of the line is delayed further, probably not before next monsoon ends, the monetary headache continues, claim the sources.
E Sreedharan, the CMD of KRCL, had in fact hinted at the annual meeting in September that "the KRCL intends to approach the centre once again to permit another $ 20 million, in order to complete the project in time and to repay major portion of short-term loans it has borrowed".
As the KRCL is not in a position to complete the project even by March '97, highly placed sources in the KRCL here disclose that it would shortly request the union finance ministry to permit a syndicated loan of another $ 40 million, through the Bank of America, based in Hong Kong.
With these loans, the delay would cost the KRCL over Rs 10 crore per month only on payment of interest. The corporation's sixth annual report states that the one-year delay, till March '96, had cost additional Rs 100 crore in the financing cost, besides Rs 200 crore on the work side.
As a result, states Sreedharan, the project cost got hiked from Rs 2034 crore estimated in February '95 to Rs 2230 crore in April '96. Similarly, the financing cost has also gone up from Rs 450 crore to Rs 550 crore, thus escalating the total cost from Rs 2484 crore to Rs 2780 crore.
The delay is caused due to severe fund shortage, general escalation in price, time over-run, adverse geological conditions and enhancement of the scope of the work, states the report. It not only includes extensive protective works in tunnelling and cutting but also building six bridges at Cortalim bank due to sinking embankments and major landslides caused in Udupi and South Goa.
The KRCL engineers are still struggling with the tunnels of Pernem and Old Goa while the landslides caused in Southernmost taluka of Canacona are yet to be removed. The problem of sinking embankments in Cortalim would also be resolved only after monsoons, it appears.
Meanwhile, they are confronted with a new problem in Majorda, 8 kms from Margao, where villagers have stopped the work of road under-bridge, which had just begun, due to flooding problem. The KRCL has suddenly changed its plan to build the road over-bridge here, blaming the state government for not sharing its cost.
Despite his categorical assurance before the general body, Sreedharan has also failed to run the trains from Kundapur (Karnataka) to Canacona - a distance of 188 kms - by November end, Kudal to Sawantwadi (Maharashtra) by mid-December and commission the whole line by year end.
