The final approval for the SilverLine semi-high-speed-rail project is likely to be delayed further as the Railway Board is looking for political clearance to give final nod for the project. The delay in giving final approval will result in overshooting of the estimated cost of the project by around ₹3,500 crore per year, according to a top source.
An official delegation led by Kerala Railway Development Corporation Ltd. (KRDCL) managing director V. Ajith Kumar is in New Delhi in connection with securing the final approval for the project.
A senior bureaucrat privy to the project said although the State was moving ahead with the social impact study and laying of alignment stones in various districts on the identified properties as per the provisions of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement (LARR) Act, 2013 the final approval for the project was subject to political approval to be granted by the Centre.
There was growing political pressure from Kerala to shelve the project, despite the State having started working on the project on top of the in-principle approval granted by the Centre, he said.
The Niti Ayog, the Centre’s apex think-tank, and the Department of Expenditure had already given permission to the project, even though the NITI-Aayog had hinted that the project cost would come around ₹1,26,000 crore. Accordingly, the State government had submitted a proposal seeking a foreign loan of ₹33,700 crore to the screening committee of the Union Finance Ministry and informed the Centre that it would shoulder the cost overrun, if any, apart from taking up the responsibility of repaying the loans.
He said the Centre was expected to forward the loan proposal to foreign money lending institutions such as the Japan International Cooperation Agency, Asian Development Bank, Asian Infrastructure Investment Bank, and KfW. The project had to be completed by 2025 and any delay in giving the final nod for the project would result in cost overrun.
It was estimated that the cost overrun would be around ₹3,500 crore per year in the initial analysis. Further, the year-on-year increase in price of material, labour, fuel charges, the variation in the value of the Indian Rupee against dollar and other global factors would have a direct bearing on the projected cost, said the official.
The project connecting Thiruvananthapuram to Kasaragod with trains running at a maximum speed of 200 km/hour is estimated to cost ₹63,940 crore as per the detailed project report submitted to Railways.
